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Gift Card Strategies
Brief Marketplace Overview

September, 2015

A recent (2014) survey by the Incentive Gift Card Council, the Incentive Research Foundation and partners of 1,123 business people, 222 of which were responsible for managing a gift cards reward program, found that among the approximately 50% of U.S. businesses that utilize gift cards, employee recognition, sales recognition, and customer recognition programs are, in order of frequency, the most frequent applications.  Customer programs are usually in the $50 range, while sales programs are at $150 per card value.

Open loop is the most popular card type, while closed loop is less popular, with restricted cards the least popular, the latter utilized mostly by large business.  Closed loop card category frequency is led by dining and department stores, followed by online retailers, online music and movie tickets, gasoline, electronics retailers, sporting goods, apparel, travel, and accessories (jewelry, handbags, etc.).  Businesses usually purchase from various sources, including local retailers, online corporate sales groups of retail brands, and gift card resellers, the latter two sources yielding a satisfaction rate of 86%.

The percent of total program budget allocated for gift cards was in the 40% range, regardless of business size.  Most purchases are online by the businesses, with, in order of importance to the card-buying customer, ease of ordering, online access, competitive card discounts, multiple brands, fulfillment and card delivery, dedicated support, personalized service, and other factors weighing in on purchase decision-making.
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