Gift cards have become an absolutely essential part of how we shop, gift, and engage with retailers and brands. 2022 was another groundbreaking year that saw gift cards reach new heights of popularity and spending. As a picky shopper myself and an expert on retail and consumer trends, I wanted to unpack the key statistics and insights that made 2022 such a pivotal year for the gift card industry.
Market Growth: Full Speed Ahead
The overarching story of 2022 was one of continued, robust expansion for the gift card market. Global gift card sales reached an estimated $843 billion, a stunning 18% increase from $716 billion in 2021[^1]. This growth trajectory has the industry on pace to surpass $1.4 trillion by 2027[^1]. It‘s hard to overstate just how impressive and important the rise of gift cards has been for the retail sector.
Looking at the U.S. market specifically, 93% of consumers either purchased or received a gift card in 2022, up from 91% in 2021[^2]. The average person bought 5 gift cards throughout the year[^2]. These topline figures point to gift cards‘ firm position as a go-to option for shoppers and gifters.
Digital Dominance
2022 also marked a major milestone in the ongoing digital transformation of gift cards. For the first time, digital gift card sales (52%) outpaced physical cards (48%)[^2]. The adoption of digital and mobile solutions ramped up significantly:
- 83% of consumers expressed interest in storing gift cards on their mobile devices[^2]
- 29% purchased or received a gift card via social media platforms like Facebook, up from 20%[^2]
Plastic gift cards certainly aren‘t going away anytime soon, but 2022 tilted the scales in favor of digital for the foreseeable future. Retailers are racing to create seamless, instant, and personalized digital gift card experiences.
Generational Divide
A fascinating aspect of 2022‘s gift card boom was how spending broke down across generations. Younger consumers were the clear driving force behind the growth:
| Generation | Share of Gift Card Purchases |
|---|---|
| Millennials | 41% |
| Gen X | 32% |
| Gen Z | 18% |
| Baby Boomers | 9% |
Source: Blackhawk Network[^3]
Millennials and Gen Z showed a strong preference for digital gift cards, while Baby Boomers still leaned towards physical cards[^3]. Retailers need to design their gift card offerings and marketing to resonate with these younger, digitally-inclined segments.
Motivations and Occasions
What motivated gift card spending in 2022? Birthdays (44%) and winter holidays like Christmas (33%) remained the top gifting occasions[^2]. But gift cards are popular year-round, with consumers also using them to say thank you/appreciation (24%), as wedding gifts (16%), and for graduations (10%)[^2].
Interestingly, "self use" of gift cards rose to 41% of purchases in 2022, up from 35% in 2021[^4]. Shoppers are increasingly buying gift cards for themselves as a budgeting tool or to earn loyalty rewards and perks.
Loyalty and Engagement Boost
Retailers reaped significant benefits from gift cards beyond just the initial sale. 72% of consumers said receiving a gift card made them more likely to shop with that brand again, and 44% said a gift card prompted them to visit a retailer they wouldn‘t have gone to otherwise[^4]. Gift cards are a powerful way to drive loyalty, repeat purchases, and new customer acquisition.
Fraud on the Rise
One troubling trend in 2022 was a sharp uptick in gift card fraud and scams. Reported gift card scam losses rose 35% year-over-year to $429 million[^5]. The most common tactic involves a scammer impersonating a government agency or legitimate business and demanding urgent payment via gift cards. Retailers and consumers both need to stay vigilant in preventing gift card fraud.
Breakage and Spillage
While most gift cards get redeemed quickly, a portion go unused indefinitely. The total unused gift card balance in the U.S. reached approximately $15.3 billion in 2022^6. 37% of consumers reported letting a gift card expire before using its full value^6.
At the same time, over half (51%) of gift card users end up spending more than the card‘s value[^2]. This "spillage" amounted to $59 per person on average in 2022[^2]. Savvy retailers view gift cards as a way to generate extra revenue and solidify customer loyalty.
Category Leaders
Diving into the top gift card categories for 2022, restaurants (30%) led the way, followed by department stores (24%), coffee shops (13%), entertainment (10%), and grocery stores (6%)[^2].
By retailer, the most popular gift cards were from major brands like:
- Amazon
- Visa (prepaid cards)
- Walmart
- Target
- Starbucks
- Google Play
- iTunes
- Home Depot
- Best Buy
- Sephora
Source: Blackhawk Network[^3]
B2B Gifting Boom
Beyond consumer gifting, the B2B gift card market also posted huge gains in 2022, surging 28% to $29 billion[^2]. Businesses are using gift cards for a range of use cases:
- 83% for employee rewards and incentives
- 67% for sales incentives
- 50% for customer appreciation
- 42% for marketing promotions
- 39% for wellness programs
Source: Incentivy^7
The ease and desirability of gift cards make them an incredibly effective tool for driving desired behaviors and outcomes in a business context. B2B gift cards will be an exciting space to watch in the coming years.
Future Innovations
Looking ahead, I expect digital gift cards to become even more seamlessly integrated into our daily lives and shopping behaviors. Innovations I‘m watching include:
- More personalized card designs and messaging
- Expanded integration with mobile wallets and payment apps
- Use of AI to suggest optimal gift card recipients and amounts
- Branded digital gift card "unwrapping" experiences
- Real-time gift card balance checking and reloading
- Augmented reality and gamification elements
While physical gift cards will still have a major role to play, the future of the industry is undoubtedly digital-first. Retailers that embrace the shift and create compelling, user-friendly digital gift card offerings will be well-positioned for success.
Conclusion
2022 was nothing short of a blockbuster year for the gift card industry. With the global market on pace to more than double by 2027, gift cards have clearly become a preferred way for people to shop, gift and engage with brands.
For retailers, gift cards will remain a crucial tool for driving top-line sales, repeat purchases, and customer loyalty. But as the landscape quickly digitizes, they‘ll need to innovate to keep up with evolving consumer expectations and preferences.
As a picky shopper myself, I‘m excited to see how retailers continue enhancing the gift card experience. No matter how high-tech and sophisticated gift cards become, they‘ll always be an easy, failproof gifting option for the hard-to-buy-for people on my list (and, let‘s face it, the occasional self-indulgent treat for me). Here‘s to another groundbreaking year for gift cards in 2023!
[^1]: Research and Markets[^2]: Blackhawk Network
[^3]: Blackhawk Network
[^4]: National Retail Federation
[^5]: Federal Trade Commission
