Consumer Gift Card Spending Back on the Rise - Givex's 6th Annual Study

November 3, 2009

TORONTO, Nov. 3 /PRNewswire/ - When gift-giving on a fixed budget, 23% of Canadians opt to buy gift cards instead of personal gifts or cash. This translates into great sales for businesses as it not only ramps up customer traffic during the holidays but also smooths out January sales when most people redeem their cards. During redemption, 50% of consumers usually spend more than the value of the card, creating additional revenue the merchant would not have had otherwise. This is a drastic increase from the 39% observed last year and suggests that gift card spending behaviour is returning to 2007 and 2006 levels.*

These findings are from a study conducted by Harris/Decima, one of Canada's most established names in public opinion and market research, and Givex, a global provider of closed loop card technologies including gift, loyalty and other stored value programs. The survey reveals consumer attitudes toward gift cards as we head into the holiday season and further areas of opportunity for retailers.

The economy may have driven people to fixate on price but deep discounting is not a sustainable strategy. Those who are loyal only to your price tag have no qualms about switching to a cheaper competing product. A superior strategy is creating strong brand affinity. Forging a connection with customers leads to enduring loyalty and can overcome price concerns. Businesses are leveraging their gift card programs to gather customer data and better target their best customers, building those connections without resorting to deep discounts.

Three-in-five (62%) Canadian consumers are likely to provide their personal information in exchange for an incentive. 21% of Canadians are likely to register online with merchants to protect their gift cards from theft or loss. Besides security, incentives such as bonus gift card funds (17%) or free product (15%) have wide appeal. Mobile technology is such an integral part of modern life that one quarter (24%) of consumers aged 18-34 are likely to provide their cell phone number to register their gift card at the store for loyalty program points, compared to the national average of 16%.

This year has also seen a major surge in demand for environmentally conscious products, including Givex's gift cards made from recycled plastic. In fact, over half (55%) of Canadians would be willing to pay more for a gift card made from environmentally friendly or recycled materials instead of plastic.

Whether gift cards are generating new revenue, building brand loyalty or serving as part of a new environmentally sensitive program, gift cards continue to be a necessity for any business.

Source: Harris/Decima telephone survey of 1,013 Canadians conducted between October 8th and October 11th, 2009. Results for a sample of this size are considered accurate +/- 3.1%, 19 times out of 20.

*Note that the findings from previous years were provided by a different survey supplier. However, every effort has been made to maintain the same methodology and market research standards.

About Givex

Givex is known for innovative stored-value technology that has driven customer acquisition and retention programs for clients in 35 countries since 1999. Givex provides a broad range of profit enhancing processes that seamlessly integrate gift cards, loyalty engines, e-couponing and targeted email campaigns. This innovation is also backed up by years of experience and the relentless pursuit of excellence that defines our technology and client support. Find out more at www.givex.com

SOURCE Givex