Spring is the season for Moms, Dads, and Grads, and if you’re looking to celebrate them why not opt for a gift card? Moneris, Canada’s leading payments provider, looked at how Canadians spend and purchase gift cards. We chatted with Kip Macartney, director, emerging and value-added services, to learn about some interesting findings around gift card giving. —Vita Daily
Hi Kip! Please tell us a bit about yourself to start.
Hi there, thank you for taking the time to chat with me. A bit about myself, I’m the Director of Value-added Services at Moneris. In this role, my team and I are focused on payment solutions that help merchants run their business and serve their customers. I’m looking forward to our conversation and sharing some timely tips and trends businesses might want to be thinking about.
Spring is the season for Moms, Dads, and Grads; what sorts of insights does Moneris have around how Canadians spend and purchase gift cards?
People shopping for gift cards are always faced with the question, “how much should I give?” or “what business should I get the gift card for?” If you’re struggling to decide how much to load, Moneris found $50 is the most common gift card value. This followed by $25 and $10 making up the top three popular activated card denominations. Gift cards to a restaurant (not including fast food) are overwhelmingly the most popular gift to get. We also found Canadians love spending their gift cards all at once. Based on redemptions, over half of all consumers (57 per cent) use the full balance in one purchase. Only 35 per cent spread it over multiple purchases.
Why do gift cards make a great gift (dare we say better than a physical item)?
Gift cards are flexible for the recipients, allowing them to choose what to buy or eat. It’s also still a personal gift, showing how you know that person, and takes away some of the anxiety associated with finding just the right gift. It’s also a great way to show support for businesses as it helps boost their revenue, especially when people go over the full amount.
What are some of the most popular types of GCs to give, and why?
Based on our data, get ready to hear a lot of gift givers say, “Dinner on me!” Restaurants (excluding fast food) are the most popular gift card scenario making up 25 per cent of activated cards in the timeframe we pulled. Giving the gift of a night out to enjoy a meal is such great experience, from the food to the atmosphere. Other popular categories include fast food and beauty/barbershops.
What’s the average amount people gift on a gift card?
$50 gift cards are the most popular making up 26 per cent of activated cards. $25 comes in second with 19 per cent and $10 makes up 16 per cent of activated cards.
When it comes to redemptions, how many of us actually use the gift cards we receive from others?
Interestingly, over half of all consumers (57 per cent) use the full balance in one purchase. Meanwhile, roughly a third of consumers (35 per cent) spread their gift card balance over multiple purchases and eight per cent either leave a balance or simply don’t spend it in the same year as their initial purchase.
How did COVID impact gift card purchases?
Gift card sales peaked in 2020 during the pandemic with consumers looking to support businesses during lockdowns. This was great movement. It was encouraging to know that Canadians were rallying to support small businesses during closures. Gift cards are a valuable tool for merchants to promote their business and to encourage repeat customers. What we are seeing with our current data can help guide merchants on peak seasons. We found most gift cards are ordered in March and July, with businesses making smaller and more frequent orders leading up to the holidays.
What about gift card fraud? Your top tips to avoid it?
Gift cards can be a target for fraud; however, it is relatively uncommon and preventable. Gift card fraud may involve a tampered card, where the fraudster gets the card number and Card Verification Code. To avoid this, we advise consumers to inspect gift cards for signs of tampering. For businesses, if you get a balance inquiry on a non-activated gift card that is a red flag as fraudsters may be checking to see if that card has been activated with money to use.
Final, personal question: the best gift card you’ve ever received?
With any gift it’s always the thought that counts, gift cards are no different. You can’t go wrong supporting a local business, and keep a look out, people might be dropping hints on something they’d like, and a gift card is a great way to make that happen!