Does Anyone Still Buy Gift Cards?

28 Feb 2024 • 3 minute read

What do you think about receiving a gift card for a special occasion? Are you excited to have the choice of what you can spend the gift card on? Does your imagination start whirring with ideas of what you can do? Or do you sink with disappointment, thinking that a gift card is a cop-out present?

Whatever your opinion, the stats don’t lie.

The latest industry report from the Gift Card and Voucher Association (GCVA) shows there is still a considerable market for gift cards. As members of the GCVA, we’re lucky to have access to this research. We’ve summarised the key points for you below.

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Official Gift Card Statistics

The latest reports from the GCVA, in association with KPMG, cover a survey of 2000 shoppers. It’s a monthly snapshot of consumer behaviour, and the January report reflects on the all-important Christmas gifting period.

Year-on-year growth for Christmas spending has dropped from 6.2% to 3.4% in 2023. Keep in mind that the prior year was bolstered by post-lockdown spending and the relaxation of Covid restrictions. It was our first full Christmas without social distancing.

Throughout December 2023, 45.9% of UK consumers bought physical gifts and gift cards or made self-use gift card purchases – it was notably lower than Dec 2022 at 54.2%. Again, this is likely to be compounded by the spike in 2022. Consumers are back to ' normal ' after the euphoria of a restriction-free festive season. Plus, we’re feeling the cost of living pressures, and many of us are making cutbacks to accommodate increasing costs.

It's worth noting, however, that the value of gift purchasing was boosted by high inflation, so although volume was lower, value wasn’t as adversely impacted as we might expect.

Looking ahead, a mixture of circumstances will impact spending on gifts and gift cards throughout 2024 and into next Christmas. The cut in national insurance will benefit many, plus some are seeing earnings growth with pay-rises. However, those who have been made redundant, had their hours reduced, or those who have to remortgage will feel the pinch.

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Gift Cards for Self-Use

Gift cards and physical gift purchasing might have dipped, but one segment outperforming is purchasing gift cards for self-use. This seems to be mainly to help with saving and budgeting. Also, people are increasingly choosing gift cards through an employee benefit programme. This area was up in December 2023 compared to Dec 2022 (14.4% compared to 13.8%), likely to help with budgeting over the festive period.

When it comes to digital or physical gift cards, it will be no surprise that consumers view physical cards as a more thoughtful present at Christmas.

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Leisure Gift Cards

Gift cards for leisure enjoyed a boost at the end of 2023, e.g. theatre tokens, spa days and hotels. Interestingly, experience gift card purchases have notably dipped from 2022 (experiences include things like hot air balloon rides or helicopter trips). The GCVA research cited a potential return to foreign holidays and travel impacting this.

Overall, the research shows us that there were £2.09 billion in total sales in H2 2023. This shows 7.4% like-for-like period growth and 7.8% rolling year growth.

Even though we were in an economic slump last year and officially in recession this year (Feb 2024), data from the gift card sector shows a resilient and positive performance. All sectors performed well, with Leisure at the top of the pile, where sales increased by 13.7% on a like-for-like basis.

As a final thought, even though we are seeing fast growth for digital gift cards (up 15.9% across the rolling year), physical gift cards still account for over half the market, so the appetite is still very much there for gift cards.

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