Gift cards have become one of the most popular gift options in recent years. Their use has surged dramatically as consumers and businesses have embraced them. 

History and Growth of Gift Cards

Gift cards first emerged in the 1990s as paper cards that could be redeemed for merchandise or services at specific retailers. They were gradually adopted by major retailers like department stores and grocery chains. However, it was the introduction of universal gift cards in the early 2000s that truly spurred their growth. These cards allowed spending at multiple retailer locations, providing more flexibility for givers and recipients.

Sales of gift cards grew steadily in the 2000s, reaching over $100 billion annually in the US by 2010 according to research firms. Their adoption was boosted by several factors:

Convenience for Givers and Recipients
Gift Card removed the uncertainty of gift giving as recipients could choose exactly what they wanted. They were also safer and more convenient than carrying cash as a gift. For busy people, gift cards were an easy last-minute gift option.

Marketing by Retailers
Retailers heavily promoted gift cards during the holidays as they drove additional purchases in stores. Shoppers who redeemed partial balances often spent more than the card value. This benefitted retailers.

Technological Advancements
The introduction of digital and mobile gift cards accelerated adoption. People could easily purchase and send cards online or via text/email without physical cards. Loading and reloading features made digital cards even more convenient.

Usage Patterns and Trends

Let’s examine how consumers are using gift cards based on recent data:

Holiday Season Remains Prime Time
Over half of all gift cards are purchased during the November-January period centered around Christmas, Hanukkah, and New Year’s. Holiday occasions continue driving most gift card sales.

Department and Retail Stores Dominate
While any retailer issues gift cards, department stores like Macy’s along with big box retailers like Walmart & Target remain the top sellers. Combined they account for over 40% of total gift card sales.

Digital and Mobile Experience Growth
Nearly 30% of gift cards are now purchased as digital/mobile cards up from just 10% in 2015. Younger consumers especially are adopting digital/mobile cards at a rapid pace.