Gift cards were the most requested holiday gift again this year and shoppers responded as sales increased seven percent during the just-completed holiday season compared to 2018, according to a new report from Blackhawk Network. As part of its 2019 Branded Pay Holiday Research series, the Pleasanton, Calif.-based third-party gift card provider said growth in e-gift cards was part of this year’s story. Digital versions of the popular gift grew 4.5 percent vs. last year and accounted for nearly 20 percent of all gift cards sold during the holiday period.
“The popularity of gift cards cannot be overstated; 80 percent of consumers reported receiving a digital or physical gift card for the 2019 holidays, making the cards a significant source of revenue for retailers. I expect that post-holiday gift cards redemptions will drive an economic impact for retailers in early 2020,” said Theresa McEndree, vice president of marketing at Blackhawk Network. “With more than half of consumers expecting to spend as much as $30 more than the value of their gift cards—and many planning to spend them within weeks of receiving them—gift cards are poised to make a huge boon for retailers in Q1. We are really excited about these results because strong gift card sales mean a strong start for 2020 retail sales.”
As the popularity of gift cards has grown, fraudsters have leveraged both the physical and digital versions to perpetrate scams on merchants. E-gift card fraud, particularly for sellers, is tough because the instant-delivery required of digital products gives retailers less time to evaluate the transaction for possible fraud.
For a detailed description of how fraudsters are taking advantage of e-gift cards and how to mitigate that risk, read our CNP white paper on the subject.