Research and Statistics

Millennials boosting retail ‘un-gift’ card sales


Millennials are driving significant growth in retailer-specific gift cards, but they’re ignoring the gifting part and using the cards themselves

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Millennials are driving significant growth in retailer-specific gift cards, but the term “gift card” is increasingly a misnomer.

According to the Mercator Advisory Group, many retailer cards bought by consumers age 18-34 aren’t being gifted for someone’s birthday or for Christmas, but used by the purchaser themselves in a mobile application, such as Starbucks’ mobile payment and loyalty program app.

See related: Infographic: Credit card love from older millennials, More infographics

Mercator has studied the uptake of retailer-specific gift cards since 2013, and the trends are strongly upward in the millennial generation. At the younger end of the cohort, the purchase of retailer cards is up to 53 percent of those age 18-24 in 2016, compared to just 38 percent in 2013. Among older millennials, age 25-34, the growth is even more substantial, reaching 3 in 5 consumers (60 percent) in 2016 versus a 39 percent uptake three years ago.

“Retailers are introducing more mobile-based apps and offers when using their loyalty and prepaid programs,” report author

Karen Augustine said. “Young adults continue to lead this mobile revolution and growing use of prepaid cards as a money management tool.”

Indeed, the trend is unique to the generation, with those age 35-64 seeing only a modest increase (from 36 percent to 42 percent) and those age 65 or older actually registering a downtrend, dropping from 37 percent to 31 percent between 2013 and 2016.

Mercator’s latest round of its survey was conducted online among more than 3,000 U.S. adults in June 2016, with results released in late August.

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