Consumers Overspend the Value of their Gift Cards Significantly Within the Restaurant Industry
The average consumer spent $38 more than the value on their gift card, up $10 from 2016, according to the 2017 Prepaid Consumer Insights Study released by First Data. The study, which is based on the responses of more than 2,000 U.S. consumers, also found that 44% of consumers visit a store they would not have visited otherwise because of a gift card, and 53% are likely to visit a store more often as the result of receiving one.
The statistics indicate that there is a tremendous opportunity for businesses to drive sales and build brand loyalty by implementing gift card strategies and solutions. This holds true for the restaurant industry as well.
According to First Data, most restaurant gift cards are purchased for fast food chains, although the vendors where consumers spend the most per gift card is at fine dining restaurants. Surveyed consumers pick up an average of 4.4 (physical and digital) gift cards to fast food restaurants, with an average total spend of $53. Fast casual restaurants fare similarly, with an average of 4.2 cards and $55 in average spend, and fine dining – higher average spend, with consumers buying an average of 2.2 cards with an average total spend of $146.
Among consumers who received gift cards, those holding gift cards to fine dining and fast casual restaurants are more likely to spend above the value of the card they received. First Data found that:
- 43% of consumers with a gift card to a coffee shop indicated they spent beyond the value of their gift cards, spending an average of $19 beyond the original value of their gift card.
- 66% of consumers with a gift card to a fast food restaurant indicated they spent beyond the value of their gift cards, spending an average of $19 beyond the original value of their gift card.
- 81% of consumers with a gift card to a fast casual restaurant indicated they spent beyond the value of their gift cards, spending an average of $20 beyond the original value of their gift card.
- 84% of consumers with a gift card to a fine dining restaurant indicated they spent beyond the value of their gift cards, spending an average of $35 beyond the original value of their gift card.
Physical Cards Still Reign Supreme, While Digital Cards Play Catch Up
First Data’s 2017 Consumer Insights Study found that consumers purchased an average of 6.5 physical gift cards on annual basis, steadily climbing from 5.9 in 2016, 5.5 in 2015, and 4.7 in 2014. While physical gift cards still dominate, the research showed that digital gift card popularity is on the rise. In the three prior years, the average number of digital gift cards purchased stayed at approximately 4.0 per consumer. This year, that number surged, and consumers purchased an average of 6.1 digital gift cards per person.
One trend worth watching is mobile gift card apps. This year, among all consumers who were aware of mobile gift card apps, 52% had used one, and millennials outpaced total respondents with 65% having used an app to purchase a gift card.
Consumers Prefer Shopping for Gift Cards at Gift Card “Malls”
The study also identified where consumers purchase gift cards. This year, nearly half – 47% – of consumers purchased a gift card at a gift card “mall” (i.e. places that sell many different types of gift cards for a number of different stores), surpassing purchases made in a physical retail stores for the first time (44%).
Generations Agree on Gift Card Incentives
Across all ages, 42% of respondents said their preferred incentive for purchasing a gift card was a discount dollar amount. With value top of mind, the next preferred incentive was a bonus gift card with the purchase of card (31%), followed by a free item with purchase (12%), and then a bonus amount added to the card (8%).
For additional information, visit the 2017 Prepaid Consumer Insights Study.