In the hilarious holiday classic National Lampoon’s Christmas Vacation, Clark Griswold has been expecting a hefty year-end bonus. When the envelope finally arrives, he opens it and announces with great disappointment: “It’s a one-year membership to the Jelly of the Month Club.” To lighten the mood, his cousin Eddie quickly interjects: “Clark, that’s the gift that keeps on giving the whole year.” Too bad, Griswold’s curmudgeonly boss didn’t think of sending him a gift card. Don’t let their small size and unobtrusive appearance fool you — the gift card is a superhero on steroids in the retail world — it keeps shattering records as it grows in leaps and bounds. Let’s take a look at some surprising facts about gift cards and why they are considered by consumers, and especially retailers, as the best gifts that keep on giving:
Every American has about $100 of unredeemed gift cards, sitting forlorn in some dusty drawer, forgotten wallet or handbag, etc. This is 100% profit for the retailer — and it adds up quickly. Get this: in 2017, the amount of gift cards that went unused amounted to about $1 billion!
Consumers are lazy. It is far easier to buy a gift card than to shop around to find the perfect gift. Hey, don’t feel guilty — everyone does it. Approximately 93% of American consumers give or receive gift cards. Remember that great line from the film, The Graduate: “I just want to say just one word… plastics.” No kidding. The average individual receives 7 gift cards each year; the average value is $45. And for the past nine years in a row, gift cards are the most requested gifts — driving the industry to the sale of more than $100 billion of gift cards per year.
Do you know why retailers love gift cards? First, they love the profits from unspent cards, of course, but second, they love that 72% of consumers do not have the discipline to stay within the limit of the card; thus, they spend more than the value of the gift card. Genius. Incidentally, the first gift card was introduced by Blockbuster (remember them?) in 1994. The next big boom in gift card sales came about in 2001 when Starbucks introduced gift cards in their stores. In 2013, Starbucks sold $16 billion worth of gift cards. However, one industry that is not happy about the success of the gift card is the gift wrap industry. Since 2001, the sale of gift wrap has steadily declined. Bah, humbug!
The gift card business is so ubiquitous and profitable that even organized crime has dipped its toe in the lucrative pool. Cartels use gift cards to launder money; counterfeiters sell fake gift cards, and thieves use stolen credit cards to purchase gift cards in order to get cash back or buy merchandise that they can sell. “Merry Christmas, you filthy animal…”
The holidays see the highest bump in sales: 20% of gift cards are sold during that busy retail period. And since 90% of gift cards are used within 60 days of purchase, retailers see those gift cards used during the holiday and winter season, boosting sales exponentially. So you see, for retailers gift cards are the best gifts that keep on giving. Tis the season to be merry…
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Read related posts: The Art of Giving Good Gifts
What Returns Cost Retailers
National Lampoon’s Christmas Vacation Trivia
The Origin of the Name Scrooge
The Inspiration for Dickens’ A Christmas Carol
Twas the Night Before Christmas
A Christmas Carol and It’s A Wonderful Life
Best Quotes from A Christmas Carol
The Inspiration for Dickens’s A Christmas Carol
The Story Behind Scrooge
What is a First Edition of A Christmas Carol Worth?
The Story Behind “The Night Before Christmas”
For further reading: http://www.giftcards.com/gift-card-statistics