Report Code: A03996
The global gift cards market was valued at $835.2 billion in 2022, and is projected to reach $4.2 trillion by 2032, growing at a CAGR of 17.7% from 2023 to 2032.
The impact of COVID-19 on the gift card market was predominantly negative. Lockdowns and restrictions resulted in reduced foot traffic and the temporary closure of many businesses, leading to decreased demand for gift cards. Additionally, consumer uncertainty and economic hardships limited discretionary spending, further affecting the market. While e-gift cards and online sales experienced some growth, it was not sufficient to offset the overall decline.
A gift card is a prepaid card that is preloaded with a certain amount of money. It may be used as a form of payment at specific stores, websites, or restaurants that accept that particular card. Gift cards may be purchased by retail establishments or businesses as gifts for others, and they may also be bought by the recipient for their own use. They are often given as gifts for birthdays, holidays, or other special occasions. Gift cards are convenient because they allow the recipient to choose what they want to buy, and they also eliminate the need for the giver to guess at the recipient preferences.
Increase in demand for digital gifting options among users is a major driving factor for the gifts card market as it is an easy and convenient way for consumers to purchase gifts for friends, family members, and coworkers, as they may be purchased online or in-store. Moreover, increased use of gift cards as rewards & incentives and consumer preference for experiences over tangible gifts are major driving factors for the gifts card market. However, limited acceptance of gift cards is a major factor hampering the growth of the gift cards market as gift cards issued by a specific retailer or brand are often only accepted at that retailer stores or online shop and cannot be used at other businesses. Furthermore, security concerns pertaining to the use of gift card is a major restraining factor for the gift cards market growth. On the contrary, rise in popularity of gifts card among different sets of users including corporate clients and individual users is anticipated to provide major lucrative opportunities for the growth of the gift cards market.
The report focuses on growth prospects, restraints, and trends of the gift cards market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the gift cards industry.
The gift cards market is segmented on the basis of card type, end user and region. On the basis of card type, the gift cards market is bifurcated into closed-loop cards and open-loop cards. On the basis of end user, it is bifurcated into retail establishments and corporate institutions. On the basis of region, it is analysed across North America, Europe, Asia-Pacific, and LAMEA.
On the basis of card type, the closed-loop card segment attained the highest growth in 2021. This is attributed to the fact that by offering closed-loop gift cards, a company may increase brand recognition and customer loyalty as customers is expected to associate the card with that specific brand. Moreover, closed-loop gift cards are a convenient and easy gift option for customers as they may be used at a specific store and do not have to be redeemed for cash. Furthermore, unlike open loop gift cards that may be used anywhere, closed-loop gift cards have a lower risk of fraud as they may only be used at specific locations. However, the open-loop card segment is attributed to be the fastest-growing segment during the forecast period. This is due to the fact that open-loop gift cards may be used at many different retailers and online merchants, giving the recipient more choices on where to spend their gift. Moreover, they are easy to purchase and may be delivered electronically, making them a convenient gift option for last-minute or long-distance gifts. Furthermore, unlike some store-specific gift cards, open-loop gift cards typically do not have an expiration date, giving the recipient more time to use their gift.
On the basis of region, North America attained the highest growth in 2021. This is attributed to the fact that gift cards have become increasingly popular in recent years in North America as they offer a convenient and flexible gift option for consumers. They are easy to purchase and may be used at a wide range of retail stores, restaurants, and online merchants, making them a versatile option for gift-giving. Furthermore, the advent of technology has made it easier for consumers to purchase and use gift cards. Gift cards may now be purchased online and redeemed through a mobile device with the rise of e-commerce and mobile commerce. However, Asia-Pacific is considered to be the fastest-growing region during the forecast period. This is attributed to the rise in disposable income levels in the Asia-Pacific region which has led to an increase in demand for gift cards, as consumers are expected to spend money on gifts and experiences. Furthermore, the growth of e-commerce in the region has made it easier for consumers to purchase gift cards online, increasing their accessibility and popularity. In addition, the Asia-Pacific region is a popular tourist destination, and gift cards make a great gift for tourists to give to friends and family back home.
The report analyzes the profiles of key players operating in the gift cards market such as Amazon.com, Inc., American Express Company, Blackhawk Network Holdings, Inc., Fiserv, Inc., Givex Corporation, InComm Payments, PayPal, Inc., Paytronix Systems, Inc., Qwikcilver Solutions Pvt Ltd., and Walmart Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the gift cards market.
Market landscape and trends
The gift cards market has seen significant growth in recent years, driven by the popularity of digital gift cards and the rise of e-commerce. Digital gift cards are more convenient and accessible than traditional physical gift cards and may be purchased and redeemed online. Moreover, gift card providers offer more customization options to differentiate themselves from competitors and create a more personalized gifting experience. In addition to the above, there is also a growth in trend towards branded gift cards and the use of gift cards as incentives and rewards in corporate and employee reward programs. Gift cards have become a popular choice for employers as they offer a flexible and convenient way to reward employees and may also be used to drive sales and customer loyalty. Another trend in the gift cards market is the use of mobile wallets and digital platforms to store and manage gift cards, making it easier for consumers to keep track of their balance and redeem their gift cards. These developments demonstrate the growth in popularity and versatility of gift cards and are expected to continue shaping the gift cards market size in the upcoming years.
Top impacting factors
Increased demand for digital gifting options
Gift cards have gained popularity, with the rise of digital and mobile technology, as they are often available in digital form, making them easy to purchase and redeem. Moreover, gift cards are an easy and convenient way for consumers to purchase gifts for friends, family members, and co-workers, as they may be purchased online or in-store. Furthermore, many gift card providers offer custom designs and personalized messages, which may add an extra special touch to a gift. In addition, gift cards in digital form have many advantages over traditional physical gift cards.
They may be purchased and redeemed instantly, without the need for shipping or handling. In addition, they allow for greater flexibility and convenience, as they may be easily stored on a mobile device and redeemed at the point of sale. Furthermore, online gift cards often have additional features, such as the ability to track the balance and transaction history, and the option to reload the card with additional funds. These features have contributed to the growth in popularity of digital gift cards and their increase in demand.
Increased use of gift cards as rewards and incentives
Gift cards are commonly used as rewards and incentives in loyalty programs, employee recognition programs, and as incentives for customers who make a purchase or complete a survey. They allow recipients to choose their own reward and make purchases at the retailer of their choice. This enhances the perceived value of the reward, as recipients may choose something that is meaningful and relevant to them.
In addition, gift cards may be easily customized and branded with a company logo and message, making them a powerful marketing tool. Another major driver of using gift cards as rewards and incentives is that they are a cost-effective alternative to other types of incentives, such as cash or merchandise. Companies may control their costs by limiting the amount on the card, while still providing the recipient with a valuable reward with gift cards. Overall, gift cards may be a powerful tool for companies looking to improve customer loyalty, increase employee engagement, and drive customer behavior.
Consumer preference for experiences over tangible gifts
In recent years, there has been a shift in consumer preference toward experiences, such as dining or entertainment, and gift cards may be used to purchase these experiences. People look for unique and memorable experiences that they may share with friends and family, rather than material possessions that may eventually become obsolete. This shift in consumer behaviour may be attributed to the rise of social media, which has made it easier for people to share their experiences with others.
In addition, people are more aware of the negative impact that material possessions may have on the environment, which further fuels their preference for experiences. Therefore, gift cards are a wonderful way to give someone the flexibility to choose their own experience, whether it is a meal at a restaurant, a concert, or a spa day. They allow the recipient to choose something that is tailored to their interests and preferences, making them a highly appreciated gift. Thus, the trend toward experiences over tangible gifts highlights the growth in importance of creating and sharing meaningful experiences.
Limited acceptance of gift cards
Gift cards are often only accepted by the issuing retailer or brand, limiting their versatility as a gift. This may be a deterrent for consumers who want more flexibility in how they spend their gift. Gift cards issued by a specific retailer or brand are often only accepted at that retailer's stores or online shop and cannot be used at other businesses. This means that the recipient of the gift card may be limited in how they may use it and may not be able to purchase what they really want or need. Many consumers opt for generic gift cards that may be used at multiple merchants, such as Visa or Mastercard gift cards to combat this issue.
These cards offer more flexibility and are accepted at a wider range of businesses, making them a more versatile gift option. Furthermore, many gift cards come with expiration dates, which means that if the recipient does not use the card within a certain timeframe, the value on the card is lost. This may be seen as a drawback by consumers who prefer gifts that do not have a limited lifespan. Therefore, limited acceptance of gift cards is a major restraining factor for the gift cards market growth.
Security concerns pertaining to gift cards
Gift cards are often stored in an electronic format, which makes them vulnerable to hacking and fraud. This may cause consumers to be hesitant to purchase or use gift cards, as they are concerned about the security of their funds. Gift cards that are stored electronically, such as those that are purchased online or those that are loaded onto a mobile app, may be vulnerable to hacking and fraud. For example, if a hacker gains access to the recipient's account, they could drain the balance on the gift card.
In addition, there have been instances of fraudsters creating fake websites that appear to sell legitimate gift cards, but actually steal the consumers' payment information. It is important to take steps to protect gift card information to mitigate these security concerns. This may include purchasing gift cards directly from the retailer or a reputable source, avoiding websites or emails that claim to offer "free" or deeply discounted gift cards, and keeping the gift card information, such as the card number and security code, private. Therefore, security concerns regarding gift cards are a major factor hampering the gift cards market growth.
Growth in popularity of gift cards among users
The gift cards market share has grown significantly in recent years, and there are several opportunities for growth and innovation in this gift cards market. Digital gift voucher have become a popular option for gift giving with the increase in popularity of online shopping. This trend is expected to continue as consumers prefer the convenience and speed of digital transactions. Moreover, many retailers have started offering multi-use gift cards that may be used across multiple brands and locations.
Multi-use gift cards provide consumers with more flexibility and options in how they use their gift cards. Furthermore, integrating gift card purchases with loyalty programs may provide an added incentive for consumers to choose a particular brand's gift card. This may increase brand loyalty and repeat purchases. In addition, the corporate gift cards market trends is a rapidly growing segment of the gift cards market. Companies use gift cards to reward employees, incentivize sales, and improve customer relations. Furthermore, the increase in popularity of mobile payments has opened new opportunities for the gift cards market. Mobile gift cards may be delivered and redeemed through a smartphone, providing consumers with a convenient and easy-to-use option.
The gift cards market thus continues to evolve and there are many opportunities for growth and innovation. Companies that may leverage these opportunities will be well-positioned to succeed in this competitive gift cards market.
Key benefits for stakeholders
Gift Cards Market Report Highlights
|Market Size By 2032||USD 4.2 trillion|
|Growth Rate||CAGR of 17.7%|
|Forecast period||2022 - 2032|
|By Card Type|| |
|By End User|| |
|By Region|| |
|Key Market Players||Blackhawk Network, Fiserv, Inc., Givex Corporation, Amazon.com Inc., Paytronix Systems, Inc., American Express Company, Walmart Inc., PayPal, Inc., InComm Payments LLC, Qwikcilver Solutions Pvt Ltd.|
The gift cards market has experienced significant growth in recent years and is expected to continue to grow. One major trend is the shift toward digital gift cards, which offer convenience and flexibility for both consumers and retailers. Another major trend in the gift cards market is the increased use of gift cards for self-use, as consumers seek to treat themselves or to manage their own spending. In addition, gift cards are increasingly being used as incentives by companies and organizations to reward customers, employees, or partners. Overall, the gift cards market is expected to remain strong, driven by changing consumer behavior and the growing popularity of gift cards as a versatile and practical gift option. In addition, there are a few other major market trends in the gift card industry. One is the growth of personalized and experiential gift cards, which allow consumers to create unique gift cards tailored to the recipient's interests or to purchase experiences such as travel, dining, or events. Another growth factor for the market is the increasing use of gift cards in cross-channel marketing campaigns, where gift cards are used as a way to drive traffic to physical stores or to boost online sales. Moreover, the use of gift cards marketplaces, where consumers can buy and sell gift cards from a variety of retailers, is also growing in popularity, providing more options for consumers and driving competition in the market. Therefore, the gift card industry is expected to continue to evolve and adapt to changing consumer preferences and technological advances.
Furthermore, market players are adopting various strategies for enhancing their services in the market and improving customer satisfaction. For instance, In January 2023, Bahrain’s ila Bank collaborated with Prizeout to help its customers purchase gift cards. The collaboration with Prizeout, a U.S.-based AdTech firm, that digitizes purchasing gift cards from more than 300 brands. Leveraging Prizeout’s proprietary technology and extensive worldwide partnerships, the product intuitively offers relevant brands to the customers and a host of added-value benefits above the purchase amount. The gift cards, delivered via email, can be redeemed at a number of retailers, ranging from Apple to GameStop or, in the case of the ila partnership, Ferrari World Abu Dhabi, which bills itself as the world’s largest amusement park. These strategies by the market players operating at a global and regional level will help the market to grow significantly during the forecast period.
Some of the key players profiled in the report include Amazon.com, Inc., American Express Company, Blackhawk Network Holdings, Inc., Fiserv, Inc., Givex Corporation, InComm Payments, PayPal, Inc., Paytronix Systems, Inc., Qwikcilver Solutions Pvt Ltd., and Walmart Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the gift cards market.
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Gift cards form an integral part of digital transaction solutions to substitute to the use of traditional bank accounts, and provide a new way to manage money. These cards facilitate alternative transaction mode to cater to the convenience specific needs of customers, which allow it to become one of the most popular transaction solution worldwide. Further, the unprecedented growth in the prepaid cards market predominantly drives the gift cards market for transactional framework in the financial services ecosystem.
The global gift cards market is estimated to witness significant growth in Asia-Pacific and LAMEA, on account of rise in demand for retail industry in countries, such as India, China, Germany, and Japan. The gift cards market share is projected to grow at a CAGR of 15.7% from 2017 to 2023, owing to increase in demand for application-specific products in the developed and the developing regions.
There is an increase in the adoption of gift cards in the retail and corporate industry due to increased penetration of increase in application areas among end users, rise in need for advanced promotional strategies, and high adoption rate of smartphones. The gift cards market is influenced by the rise in demand for technologically advanced products, and increased spending capacity of consumers. However, diverse types of fees associated with card transaction and lack of security measures as compared to credit or debit cards limit the market growth.
India is the most attractive market in Asia-Pacific and is estimated to increase at a significant rate, owing to the surge in development across end-use sectors and the increase in adoption of advanced technology to develop innovative transaction solutions.
Key players in the gift cards market are involved in the introduction of new features and capabilities, to enhance their existing product portfolio. This is anticipated to increase the product penetration and enable key providers to establish themselves in the emerging markets. For instance, in June2017, Qwikcilver Solutions Pvt. Ltd. introduced an innovative platform that lets consumers to convert their unused or partially used cards into cash.
A. Gift cards have become a popular choice for employers as they offer a flexible and convenient way to reward employees and may also be used to drive sales and customer loyalty. Another trend in the market is the use of mobile wallets and digital platforms to store and manage gift cards, making it easier for consumers to keep track of their balance and redeem their gift cards. These developments demonstrate the growth in popularity and versatility of gift cards and are expected to continue shaping the gift card market in the upcoming years.
A. North America is the largest regional market for Gift Cards
A. The global gift cards market was valued at $835.21 billion in 2022 and is projected to reach $4,183.93 million by 2032, growing at a CAGR of 17.7% from 2023 to 2032.
A. Amazon.com, Inc., American Express Company, Blackhawk Network Holdings, Inc., Fiserv, Inc., Givex Corporation, InComm Payments, PayPal, Inc., Paytronix Systems, Inc., Qwikcilver Solutions Pvt Ltd., and Walmart Inc
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