Gift cards are booming in the United States, and even catching on around the world. For the past eight years, those plastic cards have been the most requested gift in America, according to surveys by the National Retail Federation.
CNN Money writes that about two million gift cards were purchased last year in the United States, according consulting firm A.T. Kearney, with a typical amount of around $50.
Further, while many gift givers still prefer buying physical gift cards because they see them as more fun to wrap up for a kid or friend to open, e-gift cards are expected to take off. Last year, e-gift cards made up 5% of the market, a number that is expected to double by 2017.
Gift cards are seen as a win for consumers because of the convenience factor and stores love them because they not only get people to come in and come back, but also to spend more. And stores can make a handy profit on gift card sales. CVS, for instance, keeps about $4.50 for every $100 gift card purchased in the store.
CNN Money writes that the next frontier for gift cards is to replace coupons. For instance, if a customer spends $50 in a store, the retailer might offer a $5 gift card, incentivizing shoppers to come back again.
“It feels like free money, but you have to go back in and spend it,” Jenny Parris, the head of global marketing and product for Stored Value Solutions, which runs gift card programs and promos for large retailers, told CNN Money.