Are you shopping for Christmas gifts? Why Most Are Happy With Gift Cards

The hottest gift this holiday season may be one of the easiest to buy.

It turns out that shoppers don’t need to spend hours browsing online or scouring clothing racks to find a suitable gift. Research shows that people love receiving gift cards, although some shoppers are hesitant to give them.

A recent Bank of America investigation found 96% of consumers surveyed were happier or equally satisfied with gift cards as physical gifts. Another report from the National Retail Federation Gift cards found are the most popular item on consumers’ wish lists, with 53% of shoppers requesting them this year.

“There’s nothing simpler than a gift card,” said Mary Hines Droesch, head of consumer and business products at Bank of America. “It feels more personal than cash, but allows you to get something thoughtful, someone’s favorite store or brand, but you don’t have to know how tall someone is or what color she likes. There is less risk when purchasing.

Michael Caraang, 31, of Beltsville, Maryland, said there is no such thing as a bad gift. But he likes that gift cards are a forced “fun” purchase. Cash or checks are always nice, but most often this money will be used to fund basic expenses like a phone bill or car payment.

Despite this, he said he tries to avoid giving gift cards unless he’s sure it’s something the person would appreciate to avoid an “awkward situation.”

People tend to be more reluctant to give gift cards than to receive them because they are afraid of breaking social norms, according to Julian Givi, an assistant professor of marketing at West Virginia University who researched gift card preferences.

“When we think of what a gift is supposed to be, we think of the red box with a green ribbon surrounding a tangible object. Gift cards don’t really meet that standard,” Givi said. “People are reluctant to give them away due to lack of thoughtfulness. It’s not like you go to the store to pick out the perfect color shirt, the perfect size shirt. This may seem like a cop-out.

Marie Steffelassociate professor of marketing at Northeastern University, said his research found that people want to give gifts that people will like, but they also care about appearing thoughtful and increasing the recipient’s sense of social connection after receiving received the gift, which makes some people hesitate. to give a gift card.

“Recipients probably value gift cards more than givers realize, or perhaps more than givers are willing to accept and act on,” she said.

But researchers said the stigma against gift cards appears to be disappearing. Americans should spend approximately $28.6 billion on gift cards this holiday season, according to NRF. The single category most popular with donors is clothing and accessories.

The Bank of America survey showed that 68% of people give gift cards to give the recipient more say in their gift.

“Often when people buy particular things for others, the recipients don’t like those particular things,” said Joel Waldfogel, professor of applied economics at the University of Minnesota and author of “Scroogenomics: Why You Shouldn’t Buy Presents for the”. Holidays.” “A nice feature of gift cards is that they allow the recipient to make the final choice.”

They are also popular with retailers.

Sixty-one percent of shoppers spend more than the value of the gift card on their purchase, according to a 2019 survey by branded payments provider Blackhawk Network.

Gift cards can also be a drag expensive returns for retailers, according to Givi. And unused cards have been found to increase business profits, even though some states require retailers to hand over the money to unclaimed property programs to return money to consumers.

A survey on discount rates in August found 43% of American adults hold an unused gift card. This allowed some businesses to report significant revenue from “heistage,” or money from unused gift cards. Starbucks claimed $207.6 million of scrapyard turnover during the 2024 financial year.