United States Gift Card and Incentive Card Market Intelligence and Future Growth Dynamics (Databook) - Q1 2024 Update

According to the publisher, the gift card industry in the country is expected to grow by 7.2% on annual basis to reach US$214.3 billion in 2024.

The gift card industry in United States will continue to grow over the forecast period and is expected to record a CAGR of 5.7% during 2024-2028. Gift card market in the country will increase from US$199.9 billion in 2023 to reach US$267.3 billion by 2028.

The gift card market is poised to record strong growth over the medium term. The rising adoption among consumers has also resulted in new players entering the sector through strategic partnerships in the United States. The trend is projected to continue further in 2024, and thus, will support innovation and competitive landscape in the gift card industry from the short to medium-term perspective.

In the United States, the trend of mergers and acquisitions is also growing rapidly in the gift card sector. The strategy is part of global expansion plans over the medium term. In 2024, the publisher expects leading gift card providers to tap into smaller firms as they continue to strengthen their position in the market. Overall, the publisher maintains a positive growth outlook for the United States gift card industry over the next three to four years.

Payment firms are partnering with gift card providers to tap into the growing popularity of payment tool

Amid the rising demand for gift cards among consumers, payment firms are entering into strategic collaborations with gift card providers to scale businesses and diversify their revenue growth in the United States.

• Affirm, in December 2023, entered into a strategic partnership with Blackhawk Network. The collaboration will enable Affirm users to buy gift cards directly from the Affirm app. This alliance is part of Affirm’s strategy to tap into the fast-growing segment, while also allowing the firm to expand the reach of their network.
• Venmo, in October 2023, also entered into a strategic partnership with InComm to offer digital gift cards. The collaboration will enable Venmo users to send and receive digital gift cards for popular consumer brands. The gift cards will be stored in the in-app wallet for future redemption.

From the short to medium-term perspective, the publisher expects more such strategic collaborations to take place in the United States gift card market. This collaboration will further aid the growth of the digital gift card sector over the medium term in the United States.

Gift card providers are acquiring smaller firms to further cement their position in the market

Amid the growing competitive landscape in the fast-growing industry, firms are resorting to acquisition deals to further strengthen their position in the United States gift card industry. The publisher expects this trend to further continue over the medium term in 2024.

• Blackhawk Network, in January 2024, announced the acquisition of B2B gift card firm Tango Card. Tango Card revolutionized the way consumers experience rewards by creating a digital-first approach through its application interface (API). Blackhawk Network has been a longtime partner of Tango Card and also one of the early investors in the firm. The acquisition will provide Blackhawk Network with global and scalable solutions. This will subsequently strengthen its position in the gift card industry.
• RDE, the owner of Restaurant.com, also closed its acquisition of CardCash.com in January 2024. The acquisition opens up new opportunities for RDE to market its products across different channels. It also gives Restaurant.com customers more choices when they are looking to buy discounted gift cards. RDE and CardCash.com first announced the acquisition in August 2023. The combined business, notably, made over US$100 million in revenue in 2023.

CardCash.com, in December 2023, partnered with Onbe allowing consumers to trade in their unused gift cards for virtual cards that they can use right away. These virtual cards are instant payout Mastercard cards, giving consumers the freedom to spend their money at any store that accepts Mastercard.

United Airlines launched a gift card exchange program to solve the unused gift card problem in the United States

Billions of dollars worth of gift cards go unspent every year. According to a survey by Bankrate conducted in July, nearly half of American adults, about 47%, had at least one gift card or voucher they had not used yet. On average, these unused cards or vouchers were worth around US$187 each, adding up to a staggering total of US$23 billion nationwide.

Even though gift cards usually do not expire for years, it is beneficial to use them sooner rather than later. Some cards, especially those like Visa or MasterCard, may start charging fees if they sit unused for a year, reducing their value. Additionally, inflation decreases the purchasing power of gift cards over time. Consequently, to provide gift card holders with an effective solution, United Airlines launched a gift card exchange program in the United States.

United's MileagePlus Gift Card Exchange program lets gift card holders swap their cards for miles. Over 100 popular retailers are participating in the program. These include like Starbucks, Target, and even Southwest Airlines. The entire process is online. Frequent flyers can enter their gift card details and see how many miles they will get in return. Currently, the innovative exchange program is made available only for United States residents.

Gift card market in 2023 was driven a wide range of factors, which supported growth across retail and corporate segments. The primary factors included growth of ecommerce, increased adoption to incentivize employees working remotely, digital gifting, and initiatives undertaken by government, hospitality, and travel industries to revive growth.

This report provides a detailed data centric analysis of gift card market, covering market opportunities and risks across a range of retail categories. With over 75 KPIs at country level, this report provides a comprehensive understanding of gift card market dynamics, market size and forecast.

Scope

Total Spend on Gifts in United States

• By Consumer Segment (Retail and Corporate)
• By Product Categories (13 Segments)
• By Retail Sectors (7 Segments)

Gift Card Market Size by KPIs across Consumer Segments in United States

• Gross Load Value
• Transaction Value
• Unused Value
• Average Value Per Transaction
• Transaction Volume
• Average Value of Card Purchased
• Number of Cards

Gift Card Market Size by Consumer Segment in United States

• Retail Consumer
• Corporate Consumer (Small Scale, Mid-Tier, Large Enterprise)

Digital Gift Card Market Size in United States

• By Retail Consumer
• By Retail Purchase Occasion
• By Corporate Consumer
• By Corporate Purchase Occasion
• By Company Size

Gift Card Market Size by Retail Consumer in United States

• By Functional Attribute
• By Occasion

1. Festivals & Special Celebration Days
2. Milestone Celebration
3. Self-Use
4. Other

• Value by Purchase Channel

Gift Card Spend by Consumer Behavior and Demographics in United States

• Consumer Purchase Behaviour
• Gift Card Buyer by Age Group
• Gift Card Buyer by Income Level
• Gift Card Buyer by Gender

Gift Card Market Size by Corporate Consumer in United States

• By Functional Attribute
• By Occasion

1. Employee Incentive
2. Sales Incentive
3. Consumer Incentive

• By Scale of Business

Gift Spend by Product Categories (Split by Retail and Corporate Consumers) in United States

• Food & Beverage
• Health, Wellness & Beauty
• Apparel, Footwear & Accessories
• Books & Media Products
• Consumer Electronics
• Restaurants & Bars
• Toys, Kids, and Babies
• Jewelry
• Sporting Goods
• Home & Kitchen Accessories & Appliances
• Travel
• Entertainment & Gaming
• Other

Gift Card Spend by Retail Sector (Split by Retail and Corporate Consumers) in United States

• Ecommerce & Department Stores
• Restaurants & Bars
• Supermarket, Hypermarket, Convenience Store
• Entertainment & Gaming
• Specialty Stores
• Health & Wellness
• Travel

Gift Card Spend by Distribution Channel (Split by Retail and Corporate Consumers) in United States

• Gift Card Online Sales
• Gift Card Offline Sales
• 1st Party Sales
• 3rd Party Sales
• Sales Uplift

Gift Card Sales Estimates by Key RetailersReasons to buy

• In-depth understanding of gift card and incentive card market dynamics: Understand market opportunity, key trends and drivers along with five-year forecast (2019-2028) for gift cards and incentive cards in the United States.
• Develop market specific strategies: Identify growth segments and target specific opportunities across consumer segments and occasions to formulate your gift cards strategy; assess market specific key trends and risks.
• Get insights into consumer attitude and behaviour in the United States: Understand changing consumer attitude and behaviour and boost ROI. Get detailed insights into retail spend through gift cards for both retail and corporate consumers.
• Get complete perspective through six essential KPIs: number of cards in circulation, load value, unused value, average purchase value, average value per transaction, and value of transactions.
• Distribution channel insights: Understand gift cards sales dynamics by channels - online vs offline and by 1st party vs 3rd party sales.