U.S. Gift Card Market – Industry Trends and Forecast to 2031

U.S. Gift Card Market, By Products (E-Gift Cards and Physical Cards), Functional Attribute (Closed Loop, Universal Accepted Open Loop, and E- Gifting), Industry Vertical (Retail and Corporate Institutions), Merchant (Restaurants, Discount Stores, Coffee Shops, Departmental Store, Grocery Store/Food Supermarkets, Entertainment, and Others)– Industry Trends and Forecast to 2031.

U.S. Gift Card Market Analysis and Size

The gift card market thrives on convenience, offering versatile gifting options across various industries. Its adaptability caters to diverse preferences, from retail to digital platforms. Consumers enjoy purchasing flexibility, while businesses benefit from increased revenue and customer loyalty. With seamless transactions and personalized experiences, the gift card market fosters lasting relationships between recipients and brands, driving mutual satisfaction.

For instance, according to United Nations Educational, Scientific and Cultural Organization data from 2022, participation in festivals, traditions, or religious occasions exceeds 60% globally annually. This cultural prominence of festivals, coupled with the human desire for connection through gift exchanges on such occasions, has increased demand for gift cards.

Data Bridge Market Research analyses that the U.S. gift card market size was valued at USD 304.58 billion in 2023, is projected to reach USD 787.07 billion by 2031, with a CAGR of 12.6% during the forecast period 2024 to 2031. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and consumer behaviour.

Report Scope and Market Segmentation

Market Definition

A gift card, a tiny treasure unlocking countless possibilities. A token of appreciation, it whispers freedom, inviting the recipient to explore desires, fulfill whims, or savor moments. It is a personalized gesture, a doorway to joyous surprises, igniting smiles with promise. Simple yet profound, it carries sentiments beyond words, crafting memories with every swipe or scan.

Gift Card Market Dynamics

Drivers

• Rise in the Demand for Convenient Options

Gift cards provide a hassle-free gifting solution for both the giver and recipient. They offer convenience by eliminating the need to choose, wrap, and ship individual items. Whether purchased online or in-store, gift cards can be instantly delivered, saving time and effort for both parties.

• Rise in the Adoption of E-Gift Cards among Millennials

The increasing adoption of e-gift cards, particularly among millennials, reshapes the gift card industry. Digital platforms and marketing strategies are prevalent, fostering virtual engagement with consumers. This trend is expected to expand to older generations. E-commerce's prominence further boosts growth, particularly in the U.S. market, where e-gift cards drive sales and revenue.

Opportunities

• Loyalty Programs and Incentives

Gift cards are integral to loyalty programs, rewards initiatives, and staff incentives, boosting their issuance and redemption within specific retail environments. These programs foster customer engagement, employee motivation, and brand loyalty, driving repeat business and enhancing overall sales performance within targeted retail ecosystems.

For instance, in 2022, leading retailers, including Amazon, Target, and Walmart, introduced numerous new design templates, image upload options, and messaging customization features on their websites and mobile apps, enabling users to craft truly unique greeting cards.

• Increasing Adoption of Smartphone Technology in Payment Methods

Innovative digital transfers offer convenient options, appealing to a wider audience. Continuous advancements in mobile wallet gift cards anticipate significant market expansion, fueled by consumer favor towards digital payments. The rising use of smartphones in transactions presents lucrative prospects for growth in the market.

Restraints/Challenges

• Rising Fraud and Security Concerns

Hackers exploit vulnerabilities in gift card systems, using techniques such as botnet attacks to access account numbers and PINs. Analysis of gift card numbering algorithms allows them to generate valid codes. Lack of identity verification and enterprise-level security increases susceptibility. Heightened hacking risks erode consumer trust, causing a decline in gift card sales and hindering the market growth.

• Competition from Alternative Gifting Solutions

The rise of personalized branded merchandise such as jackets, hoodies, and smart water bottles, along with subscriptions to online magazines and OTT platforms, presents a challenge to the growth of the market. These alternatives are gaining traction due to their appeal to recipients and perceived higher value than traditional gift cards. As a result, some gift givers opt for these alternatives over gift cards, impacting the market expansion.

This market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.

Recent Developments

• In April 2022, eCard Systems expanded its gift card partnership with Toast, offering robust customer insights, loyalty programs, and multi-channel marketing for restaurants. This collaboration aims to enhance business growth by providing comprehensive solutions for customer engagement and satisfaction
• In August 2021, eCard Systems partnered with Paytronix to provide merchants with tools and data to optimize gift card programs, fostering customer connections and business expansion. This strategic alliance enables merchants to understand program success and strengthen customer relationships
• In April 2021, Thoughtworks launched a gift card, leveraging its technology expertise to help retailers drive customer engagement and spending habits. Gift cards serve as entry points into integrated payment and ordering systems, guiding users toward new expenditure patterns and enhancing loyalty
• In July 2020, Apple Inc. launched a universal gift card for hardware, software, and services catering to diverse consumer needs. Positioned as "for everything and everyone," it offers flexibility across Apple's product line, reinforcing the company's status as a leading provider of innovative

Gift Card Market Scope

The market is segmented on the basis of products, functional attribute, industry vertical, and merchant. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.

Products

• E-Gift Cards
• Physical Cards

 Functional Attribute

• Closed Loop
• Universal Accepted Open Loop
• E- Gifting

 Industry Vertical

• Retail
• Corporate Institutions

 Merchant

• Restaurants
• Discount Stores
• Coffee Shops
• Departmental Store
• Grocery Store/Food Supermarkets
• Entertainment
• Others

Competitive Landscape and Gift Card Market Share Analysis

The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to the market.

Some of the major players operating in the market are:

• Tele-Pak Inc. (U.S.)
• Plastek Card Solutions, Inc. (U.S.)
• Card USA, Inc. (U.S.)
• Duracard (U.S.)
• eCard Systems (U.S.)
• Blackhawk Network (U.S.)
• Card Isle (U.S.)
• Tango Card, Inc. (U.S.)
• InComm Payments (U.S.)
• Under Armour, Inc. (U.S.)
• TransGate Solutions (U.S.)
• Walgreen Co. (U.S.)
• Sephora USA, Inc. (U.S.)
• Gyft, Inc. (U.S.)
• Givex Corporation (Canada)