The most popular gift cards for the 2015 holiday season aren’t necessarily the ones with the highest resale value.
That’s according to CardHub, which, citing the National Retail Federation, said, “Gift cards are the most sought after type of present for the ninth straight holiday season.” In October, NRF said average spending for holiday this year is expected to reach $805.65 per person. And NRF is now projecting that consumers who plan to buy gift cards this year will spend on average $153.08, down from $172.74 last year.
CardHub, owned by Evolution Finance, is a search tool to help consumers find the perfect credit card for their individual needs. It is projecting that gift-card sales will rise to $131 billion in 2015, a 6 percent gain from last year’s $124 billion in sales. Put into perspective, CardHub said its 2015 projection is nearly equal to the $138 billion estimated for the entire GDP of New Zealand. The credit card research firm is projecting gift card sales to hit $149 billion in 2017. The earliest data CardHub has are from 1999, when gift-card sales reached $19 billion.
The gift cards that increased in popularity the most from last year are TJ Maxx, Chick-fil-A and Home Depot. The gift cards whose popularity declined the most from a year ago are Ikea and QVC.
According to data from CardHub, the top 10 gift cards for holiday 2015 are: Visa; Amazon; American Express; iTunes; Wal-Mart; Target; Starbucks; Netflix; eBay and Google Play. The ones with the highest resale value are: Shell; Wal-Mart; Target; MasterCard; Home Depot; Costco; Apple Store; Babies ‘R’ Us; Visa and Ikea. Gift cards with the lowest resale value are form Google Play and H&M.
Several retailers and e-tailers in the fashion space were part of the top 50 most popular gift cards, even though they didn’t make the top 10. Those, and their ranking, include: Macy’s at 14; Sephora, 16; Costco, 19; Etsy, 21; Nordstrom, 26; Forever 21, 28; H&M, 31; Nike, 33; T.J. Maxx, 40; Old Navy, 44; Babies ‘R’ Us, 45; Sears, 47; J.C. Penney, 49, and QVC, 50.
CardHub also noted that gift cards can be bought at discounts of up to 26 percent, when acquired through online gift card exchanges. Also, general-purpose gift cards such as Visa and American Express charge fees so issuers can turn a profit, while store-issued gift cards do not — although the retailers do book the profit the moment the card is purchased. The credit card research firm also said that many stores now allow one to trade in an old unused gift card for new ones, which can be used for re-gifting.
And while e-gift cards have been gaining traction, with increased mobile functionality expected to foster more widespread use of them this holiday season, they don’t quite yet have staying power the way traditional plastic cards do.
Tony H. Cui, associate professor of marketing with the University of Minnesota’s Carlson School of Management, said retailers have to work on adding values to gift card giving rather than simply selling the virtual cards online. ‘This could include personalization of e-gift cards online,” Cui said, adding that creating buzz among friend circles would help as well.