The cost-of-living crisis is changing how consumers purchase and use gift cards, with almost half (47%) of British consumers taking advantage of gift card promotions such as bonus card value or discounts to combat inflation, according to The UK Prepaid Consumer Insights Survey released today by Fiserv, Inc., a leading global provider of payments and financial technology solutions.
“The rising cost of living is having a direct impact on the gift card market. The way people are buying and using gift cards is changing, with consumers turning to gift cards to budget and to take advantage of discounts and loyalty rewards,” said Sam Lituchy, vice president and head of gift solutions at Fiserv.
Despite a looming recession and the squeeze on consumer purse strings, gift card purchasing remains steady in the UK. In 2022, 58% of UK consumers purchased the same amount or more gift cards as they did in 2021. Inflation is impacting consumer use of gift cards, with 20% of consumers saying they are using gift cards to help counteract higher prices, and 19% saying inflation is prompting them to use gift cards to purchase items of necessity rather than wants.
At a time when discretionary consumer spending is constrained, with a substantial impact on retail, hospitality and leisure businesses, brands that help customers get more for their money when purchasing gift cards can support purchasing activity and boost retention. Two thirds of Brits (67%) say promotions would motivate them to purchase more gift cards in future. According to the study, the top incentives for consumers to purchase gift cards include bonus gift cards with a purchase of a gift card (33%), a free item with a purchase (27%), a bonus amount added to the gift card (24%) and monetary discounts (15%).
