£3bn spent on pre-paid gift cards this Christmas
Posted on in Business News
Sales of pre-paid gift cards surged over Christmas as shoppers looked for ways to cut down on buying unwanted gifts.
The increase in sales of almost 10% during the festive shopping period means vouchers worth more than £3 billion were sold.
The demand means that more than 100 million gift cards and vouchers were given as presents, according to the figures based on initial estimates by Prepaid International Forum (PIF).
PIF co-chairman Alastair Graham said: ‘People are saying: "I don't want to waste my gift, I want people to have something they'll like." So those weird and wonderful gifts people used to buy on a whim when times were more buoyant are a thing of the past.
‘We have become more of a utilitarian gifting society and vouchers and gift cards have lots of perceived benefits in an economic climate like this.'
He said the rapid growth in gift cards was also being driven by the trend for big discounts by retailers, leaving shoppers wary of missing bargains. ‘When people see products being discounted, they see vouchers as a way of hedging their bets. Rather than having a gift you have bought cut in price before Christmas has even arrived, people know for certain that if you buy something after Christmas you are sure to get the best price. We are becoming different people after the recession and we are behaving in different ways,' he said.
The number of pre-paid plastic cards now outsells paper vouchers by more than two to one and rising, according to another body, the UK Gift Card and Voucher Association.
Last August, John Lewis replaced its paper voucher system with pre-paid cards. A spokeswoman said: ‘Customers have reacted really positively and we're very pleased with how they have been performing to date.'
The UKGCVA estimates that 57 per cent of consumers gave a gift card or voucher this Christmas compared with 49 per cent last year.
Accountancy firm BDO released research last month suggesting the number of gift cards and vouchers sold was growing at 9.7 per cent in the third quarter last year.
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