Friday, December 20, 2013
Gift card buying jumps at holiday outset
First Data Corp.'s SpendTrend analysis of electronic transactions processed for the first week in December 2013 showed that closed-loop gift card purchasing had hit a "lull." But that shouldn't dampen the enthusiasm for SpendTrend data from the previous week of Oct. 31 through Dec. 2, 2013, as the acquirer revealed that gift card buying jumped by 8.9 percent from the same time last year. The spike occurred despite fewer November shopping days following Thanksgiving this year than in 2012, First Data said.
The growth in consumer usage of prepaid cards may reflect a shift to a more conservative approach as the holiday gift buying season ramped up.
"Although spending growth increased on a year-over-year basis, the growth slowed on a sequential basis as consumers were more modest in their purchases throughout the month as they prepared for the holiday shopping season," said Krish Mantripragada, Senior Vice President of Information and Analytics Solutions at First Data.
"We definitely see that consumers are more confident and have enjoyed stronger income growth in 2013 compared to 2012," Mantripragada added. "This should encourage shoppers to open up their wallets as the holiday season progresses."
First Data attributed the slump in gift card purchasing during the following week − the amount loaded onto gift cards was down by 7.3 percent from the corresponding week in 2012 − to gift card promotions and extended store hours during the previous week. "Gift cards remain a top gift-giving item and merchants will likely ramp up gift card promotions again as the holiday season progresses," First Data said.
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