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  • Published On : Feb 2024
  • Code : CMI3444
  • Pages :120
  • Formats :
      Excel and PDF
  • Industry : Consumer Goods

The gift card Market size is valued at US$ 1,158.99 Bn in 2024 and is expected to reach US$ 3,648.36 Bn by 2031, growing at a compound annual growth rate (CAGR) of 17.8%  from 2024 to 2031.

Market Regional Insights:

  • North America is expected to be the largest market for gift card, which is expected to grow at a CAGR of over 39% during the forecast period. The growth of this market in North America is attributed to increasing demand for gift card in countries such as the U.S. and Canada.
  • Asia Pacific is expected to be the second-largest market for gift card, which is expected to grow at a CAGR of over 28% during the forecast period. The growth of this market in Asia Pacific is attributed to increasing demand for personalized and digital gifting solutions.
  • Europe is expected to be the fastest-growing market for gift card, which is expected to grow at a CAGR of over 18% during the forecast period. The market is being propelled by factors such as the use of gift cards by businesses for employee recognition, the growing trend of e-gifting, and the increasing adoption of advanced payment technologies.

Figure 1. Gift Card Market Share (%), By Region, 2024

Gift Card Market By Region

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Analyst’s Views:

The retail sector has been swiftly embracing gift cards as an effective promotional tool to attract customers and drive sales especially during holiday seasons. Moreover, some retailers have started issuing gift cards for every purchase which is further fuelling their popularity.

North America currently dominates the global gift card space owing to the high adoption of gift cards as an alternative to tangible gifts. However, Asia Pacific is expected to emerge as the fastest growing market on the back of rising disposable incomes, expanding retail industry, and changing shopping patterns in countries like China, India, and Japan. One major challenge for the widespread acceptance of gift cards is the additional costs incurred by retailers for the production and security of the cards.

On the technology front, the shift towards digital and mobile gift cards is opening new opportunities for players. The ease of use and environment friendly nature make digital cards a desirable option for both merchants and customers. Furthermore, the growing trend of corporate gifting is creating a steady demand for bulk purchasing of gift cards from large firms. Overall, the gift card industry remains a lucrative and relatively untapped space for payment firms and card issuers to expand their business.

 Market Drivers:

Growing Trends of Gift Giving during Festivals and Special Occasions: Festivals and special occasions have become increasingly important events for exchanging gifts across many societies around the world. As discretionary incomes rise globally, consumer are looking to express care, gratitude and goodwill to friends and family through thoughtful gifts during these celebrations. Gift cards have emerged as a popular gifting option as they allow the recipient flexibility to choose what they want or need. According to United Nations Educational, Scientific and Cultural Organization data from 2022, over 60% of the global population participates in some form of festivals, traditions or religious occasions annually. This widespread cultural significance of festivals and the human need to feel connected through gift exchanges on these days has boosted demand for gift cards.

Gift cards fulfill the dual purpose of being both a tangible token of affection as well as a stand-in for cash. Particularly after the isolation of the COVID-19 pandemic in the past two years, occasions like holidays, birthdays, weddings or religious festivals in 2023 are projected to see even greater emphasis on gift-giving.

Birthday Celebrations & Special Occasions: Birthday celebrations and other special occasions have become increasingly popular ways for people around the world to connect and express care for their loved ones. As their societies have become more mobile and digitally connected, these celebrations help preserve human relationships despite physical distances. The growing preference for experience gifts over material gifts has also elevated the significance of birthday celebrations and occasions as a means to create memorable moments together. This rising focus on experiences and relationships has fuelled robust growth in this market. Gift cards have emerged as a pragmatic, universally appreciated way to support loved ones in commemorating their special days according to their own wishes and interests. Unlike physical goods which may not align perfectly with the recipient's preferences, gift cards allow people to choose experiences that hold personal meaning for them from a wide range of retail and service options.

The convenience and flexibility of gift cards have made them the preferred gifting choice for most celebratory events. Recent 2022 data from the United Nations World Tourism Organization found that the social aspect of experiences has become integral to young consumers' lifestyles globally. An estimated 63% of global youth surveyed in 2022 said sharing experiences with close friends and family is very important to them. This aligns with the uptick in gift card usage for celebrations as it facilitates collective experiences among loved ones. Additionally, celebrations which were often limited to immediate family are now increasingly involving extended networks through digital technologies. This has multiplied the number of gifting exchanges and amplified the impact of gift cards on the overall market.

Market Opportunities:

Growth of E-Commerce Industry: The growing e-commerce industry is offering promising opportunities for this market. As more consumers are shopping online due to increased digitalization and convenience of online platforms, gift cards have emerged as a popular gift-giving option in the virtual world. This trend is particularly predominant among millennial and Gen Z consumers who are adopting digital payments and making significant transactions online. Gift cards fulfill the purpose of gift-giving in the modern digital era by allowing users to shop at major e-commerce websites and apps without physically exchanging cards. E-gift cards are digitally delivered to recipients via email, text messages or messaging apps. They can be used to purchase a wide assortment of products online from fashion and lifestyle brands to travel and hotel bookings to streaming subscriptions. The flexibility and ease of e-gift cards make them an attractive promotional and loyalty tool for online retailers looking to drive sales and customer engagement.

The growth trajectory of this market is poised to rally driven by the booming e-commerce sector. Digital gift cards are expected to gain higher market share with increased innovation.

Multi-Purpose Cards: Multi-Purpose Gift Cards have the potential to be a major growth opportunity in this market. The gift card market has traditionally been fragmented with different types of single-store or branded gift cards that can only be redeemed at certain merchants. However, there is a rising demand for more flexibility and universal acceptance. Multi-Purpose Gift Cards, which can be spent across a wide network of retailers, provide consumers with a convenient option to shop at multiple stores from a single pooled fund.

These open-loop cards are rapidly gaining popularity as they allow the recipient to choose which retailer and products they want, based on their unique needs and preferences. Rather than being locked into a specific store, multi-purpose cards empower the user to select the perfect gift from a variety of options. This enhanced flexibility and customizability addresses a pain point for both gift-givers and receivers. It reduces the hassle of figuring out the right store-specific card each time and minimizes the risk of the recipient being stuck with a gift they may not fully want or need

As cross-border shopping and digitalization continue gaining steam, multi-purpose gift cards have the potential to become the preferred gifting option.

Gift Card Market Report Coverage

Report Coverage Details
Base Year: 2023 Market Size in 2024: US$ 1,158.99 Bn
Historical Data for: 2019 to 2023 Forecast Period: 2024 - 2031
Forecast Period 2024 to 2031 CAGR: 17.8% 2031 Value Projection: US$ 3,648.36 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, and Mexico
  • Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa:  GCC Countries, Israel,  and Rest of Middle East
Segments covered:
  • By Type: Universal accepted open loop, Restaurant closed loop, Retail closed loop, Miscellaneous closed loop, E-Gifting
  • By Merchant: Restaurant, Department store, Grocery stores/food supermarket, Discount store, Coffee shop, Entertainment, Others
Companies covered:

Apple Inc., Inc., Best Buy Co., Inc., Starbucks Corporation, Target Corporation, and Wal-Mart Stores, Inc.

Growth Drivers:
  • Growing Trends of Gift Giving during Festivals and Special Occasions 
  • Birthday Celebrations & Special Occasions
Restraints & Challenges:
  • Limited Expiry Dates

Market Trends:

Growth in Corporate Gift Card Programs: Many large corporations have started implementing gift card reward and incentive programs for their employees and also use them as a tool to strengthen client and vendor relationships.

As corporate programs have expanded, they have become a major source of revenue for gift card providers and merchants. This has encouraged more businesses to enter the market as demand rises. Many new distributors and processing platforms have launched that specialize in corporate programs, real-time rewards functionality, data analytics and customized card solutions. Their innovations are elevating service standards for all gift card users. Global brands have also increased their focus on gift cards as an important part of their rewards/loyalty strategies. The growth of corporate programs demonstrates how gift cards have become a ubiquitous incentive and recognition tool for businesses. As their usage grows for employee and client motivation, it will continue pushing expansion in the gift card industry through increased market activity, specialized solutions and higher consumer exposure to the benefits of gift card offerings.

Personalized Gift Cards: The trend of personalized gift cards has been steadily growing over the 2021, and is having a significant impact on the gift card industry worldwide. Personalized gift cards allow givers to add a custom message, photo, or design which makes the gift more personal and special for the recipient. This has appealed to many consumers as it takes the gift card experience beyond a basic plastic or paper card with a barcode. Personalization allows the giver to put more thought into selecting the design and customize it just for the recipient.

Many large retailers and payment companies now offer options to fully customize gift cards online with hundreds of design templates and images to choose from. Recent data from the UK Gift Card and Voucher Association found that 43% of consumers would prefer to receive a personalized gift card over a standard option. As more consumers look to send gifts digitally, the opportunity for personalization has increased adoption of e-gift cards as well.

The increased demand is driving retailers and payment companies to continuously invest in expanding their personalization capabilities. For example, in 2022 major retailers like Amazon, Target and Walmart rolled out many new design templates, uploaded image options, and messaging customization features on their websites and mobile apps. This allows givers to truly create one-of-a-kind cards.

Market Restraints:

Limited Expiry Dates: Limited expiry dates on gift cards is one of the major restraints impacting the growth of this market. When gift cards come with expiry dates, they put pressure on consumers to spend the card value within a stipulated time period. This limits the flexibility and spontaneity of spending for recipients. The looming deadline of an expiry date can act as a deterrent for many recipients who want to use the gift card for their planned purchases later. Additionally, expiry dates often are not clearly communicated to gift card recipients upfront. Many users are unaware of the validity periods and end up losing unused balances when the cards expire. This creates a negative sentiment around gift cards. According to a survey by the UK Consumer Association in 2021, about 25% of gift card recipients had portions of balances go unused due to unawareness of expiry dates. Such experiences diminish the appeal of gift cards for future use. They also discourage givers from opting for gift cards again.

This constrains the repeat usage and recommendation potential of gift cards. It holds back the market from reaching new users and addressable occasions for gifting. Marketers struggle to promote gift cards as a preferred gifting option when the usability is capped by short validity windows. Even for recipients who are aware, the pressure of deadline leads to suboptimal spending decisions just to avoid losing the value. This impacts merchants as well, as such forced purchases may not always align with recipients' true needs or budget.

In recent 2022, some governments and non-profits have pushed retailers to introduce open-ended gift cards without expiry dates. In the US, states like California and Connecticut passed legislation prohibiting expiry dates on gift cards under US$ 100. Similar moves followed in Canada and countries in Western Europe. According to data tracked by Pew Research, the proportion of no-expiry gift cards sold increased from 35% in 2020 to 48% in 2022 across major global markets. While this development has positively impacted consumer sentiment, the market is yet to realize its full growth with many large retailers still relying on limited-date gift cards. Abolishing expiry clauses can unlock unprecedented opportunities for this Market by boosting appeal, repeat rates and addressable spend occasions for gift cards worldwide.

Counterbalance: To overcome this restraint, the key market players need to expand their product expiry date, which might increase this market's growth.

Recent Developments:

  • In April 2021, Thoughtworks, a global technology company that provides software design and delivery, and tools and consulting services, launched a gift card. According to that, for retailers, gift cards have become potential entry points to guide the customers into the closed loop of payment, membership and ordering system. They can cultivate users to generate new expenditure habits.
  • In July 2020, Apple Inc. launched universal gift card for hardware, software, and services. This card is promoted as being "for everything and everyone," and it can be used for products, accessories, apps, games, music, movies, TV shows, cloud, and more. Apple Inc is a leading designer, developer, and seller of consumer electronics, computer software, and online services. The company's product line includes the iPhone, iPad, Mac, Apple Watch, and Apple TV, with operating systems such as iOS and macOS.

Mergers and Acquisition:

  • In June 2020, Target Corporation acquired technology assets from Deliv, a crowd sourced, last-mile logistics company. The acquisition included Deliv's proprietary technology that assists in the batching and routing of deliveries. Target Corporation is a retail corporation that operates a chain of discount department stores and hypermarkets.

 Figure 2. Global Gift Card Market Share (%), By Type, 2024

Gift Card Market By Type

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Top Companies in this Market

  • Apple Inc.
  • Inc.
  • Best Buy Co., Inc.
  • Starbucks Corporation
  • Target Corporation
  • Wal-Mart Stores, Inc

Definition: The gift card is an artificial prepaid debit card that is loaded with a specific amount. It is used for various purposes, such as gifting someone and purchasing things. Most consumers, including millennial and the older generation, have a rising demand for gift cards due to their ease of use and the increasing adoption of smartphone payment technologies. The growing social trends of online gift-giving and rising demand from millennial are expected to drive market growth.

Frequently Asked Questions

Limited expiry dates are expected to hampering the market growth of global gift card market.

Growing trends of gift giving during festivals and special occasions, and birthday celebrations & special occasions are the major factors driving the growth of the global gift card market.

The E-gifting sub-segment is the leading type segment in the global gift card market. 

Major players operating in the global gift card market includes Apple Inc., Inc., Best Buy Co., Inc., Starbucks Corporation, Target Corporation, and Wal-Mart Stores, Inc.

North America region leads the global gift card market.

The CAGR of the global gift card market is 17.8%.

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