As more and more retailers look to increase revenue and customer loyalty, open loop gift cards have emerged as a popular option. With the ability to be used at a variety of locations, these gift cards provide a convenient and versatile option for shoppers. But what do the latest statistics say about the use and impact of these gift cards on the retail industry? In this article, we’ll explore key insights from recent open loop gift card statistics and what they mean for retailers looking to stay ahead in a competitive market.
What are open loop gift cards?
Open loop gift cards are prepaid cards that can be used at multiple merchants or retailers, as opposed to closed loop gift cards which can only be used at a specific brand or store.
How popular are open loop gift cards in the market?
Open loop gift cards are gaining popularity in the market, with a projected growth rate of 9.
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How do consumers perceive open loop gift cards?
Consumers perceive open loop gift cards as a convenient and versatile gifting option, with 72% of consumers preferring to receive a gift card over a physical gift.
What are the latest trends in open loop gift card usage?
The latest trends in open loop gift card usage include the rise of digital gift cards, increased use of gift cards for self-gifting, and the integration of gift card programs with mobile wallets.
In conclusion, exploring the latest open loop gift card statistics can provide key insights for retailers seeking to improve their sales and customer engagement. By leveraging the flexibility and convenience of open loop gift cards, retailers can tap into new customer segments, increase revenue, and drive repeat business. As more consumers embrace the flexibility and convenience of gift cards, retailers who stay ahead of the curve will be well positioned to thrive in today’s competitive retail landscape.
In essence, increased consumer adoption coupled with greater loads in key government sectors including unemployment, court ordered payments, and social security continue to drive increased loads for Open-Loop Prepaid Cards. However consumers also weighed in by purchasing more Open-Loop products this year than last, especially of Prepaid Financial Services Cards. The Open-Loop Gift Card segment still needs to be viewed in context. This is a conservative estimate that presumes In-Store issuers fail to fight and win back market share from the Open-Loop products. However, these issuers are not likely to sit idle. The Seventh Annual Prepaid Market Forecasts to report is the last of the annual trilogy of closely followed prepaid benchmark reports Open-Loop, Closed-Loop, and Prepaid Market Forecast that provide a thorough analysis and documentation of the growth and development of the Prepaid Industry. It benchmarks the load, growth, and market dynamics for all Open-Loop Prepaid Solutions. This includes a review of the dollars loaded on Open-Loop Prepaid products in 18 different market segments. All rights reserved. Update to Our Privacy Policy. Looking for gift cards in another region? We have regional sites for our European and Canadian customers. NGC is able to work with many of its merchant partners to block and credit a card value should the card be lost or stolen. Our Story. NGCs mission is to provide secure innovative gift card technology solutions and world-class service to connect brands with the corporate and consumer marketplaces. Most importantly, several Open-Loop segments have had future growth rates substantially increased to reflect the actual growth measured in This forecast was executed just after significant new legislation was signed into law, but before regulatory bodies could modify the regulations to reflect these laws. While Mercator has attempted to adjust forecasts to reflect the impact of this legislation, it is impossible to predict all the consequences of this legislation. As identified in the Open and Closed-Loop Benchmarks, several segments have been eliminated this year and are no longer tracked by this forecast. One of the 69 Figures from the 48 page report. Contact Us. NGC Social.
Mercator Advisory Group predicts that dollars load on closed loop private label gift cards will increase slightly this holiday season fourth quarter by 1. It can be argued that this slower growth rate is the result of a soft holiday season. This assumes consistency in the seasonality of gift card sales. Any variation from the considered norm of course will have an impact on this prediction. This is an optimistic prediction. The ongoing story in prepaid is that open loop continues to gain momentum, becoming a greater solution for cash and check replacement. In several prepaid segments open loop surpasses closed loop dollar loads, which have historically been higher. As it relates to prepaid holiday gift card sales, open loop benefitted in from the economic downturn as some consumers, reluctant to purchase a closed loop card due to concerns over potential merchant bankruptcies, turned to open loop cards as a safer bet. Also, consumers are coming to appreciate the flexibility open loop cards offer, allowing recipients to select the gift that best suits their needs even if the funds are spent on gas, groceries or other practical purchases. With more retailers minimizing inventories it is likely there will be more out of stock situations earlier this season and a reduced category choice, making gift cards well positioned as a viable alternative to sold out targeted merchandise purchases. The rate of decline suggests that the largest merchants that have been marketing their gift card programs for several years may have reached something close to saturation. Any substantial growth comes from the few large and mid-size retailers that have only recently started to heavily market their programs and through growing distribution through prepaid malls. In , is is estimated that closed loop in-store gift cards will experience a 1. The closed-loop estimate falls in line with recent transaction reporting from First Data. The payment processor reported a While this number at first seems impressive, the scanty 1. That places the forecast of 1. Some good news this year is that the bankruptcies that characterized early are unlikely to be repeated this year, which bodes well for closed loop gift cards. The Primary Data Research series is based on a national sample of 1, online consumer survey panel with survey responses completed between May 28 and June 4, Overall, the primary data shows that consumer appeal for gift cards is undeniable, having gained cultural acceptance, and achieved superior preference over cash and checks as gifts. General purpose cards are also prized in gifting situations due to their ultimate flexibility to the user.
