Gift cards aren’t just a last-minute savior; they are a retail juggernaut. While physical cards still hold space in wallets, the industry is rapidly shifting toward digital solutions and self-use trends. With billions of dollars in circulation (and billions more sitting unused), keeping up with the data is crucial for retailers and shoppers alike.
We dug into the latest market research to break down exactly how people spend, save, and lose their gift card balances. Here is the essential data on the gift card economy.
Key Takeaways
- Hidden Billions: Americans are currently sitting on approximately $21 billion in unspent gift cards.
- Digital Surge: The global digital gift card market is projected to reach nearly $724 billion by 2028.
- The Uplift Effect: Seventy-four percent of consumers spend more than the card’s face value when redeeming it.
- Top Wishlist Item: Gift cards have remained the number one requested holiday gift for over 15 consecutive years.
30 Gift Card Industry Statistics
Here is a breakdown of the numbers driving the plastic (and digital) currency economy, from demographic preferences to seasonal spending spikes.
Gift Card Usage Facts
Who is buying, how much are they spending, and are they actually using the cards?
1. Holiday Domination
December is the undisputed king of gift card sales. Historical data shows that nearly 50% of annual digital gift card revenue comes from the holiday season. While the pandemic accelerated online adoption, the trend of stuffing stockings with plastic, or email codes, remains the industry’s biggest revenue driver (1).
2. The “Self-Gifting” Trend
It’s not just about giving. A significant chunk of gift card sales comes from people buying them for themselves to earn loyalty points, stick to a budget, or take advantage of retailer discounts. In the restaurant sector specifically, fine dining and family-style chains have seen a resurgence as people treat themselves to a night out (2).
3. Billions in Limbo
Americans are notoriously bad at redeeming their balances. As of 2023, U.S. consumers were holding onto roughly $21 billion in unspent gift cards. Whether they forget about them, lose the physical card, or just wait for the “perfect” moment that never comes, that money stays in the retailer’s pocket until redeemed (3).
4. Millennials Hold the Bag
Millennials are the most likely generation to have unused balances sitting in a drawer. Fifty-six percent of this demographic possess unredeemed cards, with an average value hovering around $139. Compare that to Baby Boomers, who are far more likely to cash theirs in quickly (4).
5. Mother’s Day Growth
Mom loves a shopping spree. The average spend on Mother’s Day gift cards has nearly doubled over the last decade, jumping from roughly $13 in 2009 to over $24 in 2022. It is a clear sign that people are moving away from generic flowers and letting Mom choose exactly what she wants (5).
6. The “Uplift” Bonus
Retailers love gift cards because they act as a discount coupon that encourages overspending. Seventy-four percent of consumers spend an average of $54 more than the value of the card. It lowers the psychological barrier to purchasing expensive items, leading shoppers to buy things they wouldn’t normally touch.
7. Utility Over Customization
While a photo on a card is cute, most people don’t care. Forty-three percent of Americans wouldn’t pay a cent more for a personalized card. They care about the value and the retailer. If you are selling gift cards, focus on the utility and ease of delivery rather than fancy customization options (6).
8. The Preferred Employee Bonus
Pizza parties don’t pay the bills. Nearly 70% of employees prefer gift cards over other incentives like company swag or generic discounts. It gives staff the freedom to choose their own reward, making them feel genuinely appreciated rather than patronized.
9. A Magnet for Fraud
The anonymity of gift cards makes them a favorite tool for scammers. Since 2018, gift cards have topped the list of fraudulent payment methods. From “IRS” scams to fake tech support calls, millions are lost annually. If someone demands payment in gift cards, it is a scam 100% of the time (7).
10. Generational divides
Millennials are the power buyers, accounting for 37% of gift voucher sales. Gen X follows at 28%. Interestingly, while Millennials buy the most, they also hoard the most unused cards (see fact #4), suggesting they view them as a form of savings rather than immediate spending money (8).
Digital Gift Cards (eGifts)
Plastic is slowly dying out as digital wallets and instant email delivery take over.
11. Social Commerce
Social media isn’t just for scrolling; it is for gifting. There has been a massive spike in consumers using social platforms to purchase prepaid cards, jumping from 17% adoption in 2018 to nearly half of all buyers today. Integration with apps like Instagram and TikTok has made sending a coffee or cash instant (9).
12. The Decline of the Plastic Rack
The “gift card mall” at the grocery store is seeing less foot traffic. In-store purchases dropped by 7% between 2020 and 2021 alone. While physical retail isn’t dead, the convenience of buying a code online without leaving the house is eating away at physical sales (10).
13. Search Volume Spikes
Google searches for “gift cards online” doubled in recent years. This correlates with the desire to avoid shipping fees and delivery delays. Why wait for a plastic card in the mail when a digital code arrives in seconds? (11).
14. Explosive Digital Growth
While traditional physical cards are growing at a steady 9% annually, digital gift cards are sprinting ahead with projected growth of over 26% per year through 2025. By 2026, the global market is expected to top $584 billion (12).
15. Mobile Integration
Nobody wants to carry a bulky wallet anymore. Nearly half of consumers want their gift cards stored directly in their mobile wallet (Apple Wallet, Google Pay). This reduces the “lost card” factor significantly, as the phone is always with them (13).
16. The “Safe” Gift
When in doubt, go digital. Seventy-one percent of consumers actually prefer receiving a digital gift card over a physical object. It eliminates the hassle of returns and exchanges. For the giver, it removes the anxiety of picking the wrong size or color.
17. Speed is King
Why are digital cards winning? Immediacy. Seventy-seven percent of buyers cite instant delivery as their primary motivation. Whether it is a last-minute birthday gift or a “thinking of you” gesture, the ability to send value instantly via text or email is unbeatable (14).
18. Tech-Savvy Spending
Unsurprisingly, younger generations fuel the e-gift fire. Sixty-one percent of Millennials purchase digital gifts quarterly, compared to just 14% of Baby Boomers. As Gen Z gains more purchasing power, expect the digital-first trend to become the absolute standard.
19. The Physical Holdouts
Despite the digital boom, tangible cards aren’t extinct. A slight majority (54%) of consumers still like the physical act of handing over a card. It feels more like a “real” present to them than an email. Physical cards still reign supreme for in-person events like weddings or showers (15).
20. Customer Acquisition Tool
Digital cards are a low-risk way for customers to try new brands. For eCommerce businesses, gift cards are a major acquisition channel. A new customer is far more likely to shop with you if they are spending someone else’s money first (16).
Gift Card Market Trends
How the market is evolving beyond simple present-giving.
21. The #1 Wishlist Item
For 15 years running, gift cards have been the most requested holiday gift. Fifty-nine percent of consumers explicitly ask for them. The stigma of gift cards being “impersonal” is effectively dead; people want the freedom to choose.
22. Global Market Cap
The digital gift card market is compounding at a rate of 14.2% annually. By 2028, it is expected to reach a staggering $724.3 billion. The versatility of “open-loop” cards (like Visa/Amex) contributes heavily to this, as they can be used for groceries, gas, or bills (17).
23. Public Health Incentives
Gift cards solve problems beyond retail. Governments and health organizations frequently use them to drive behavior. For example, Boston health officials successfully distributed millions in gift cards to boost vaccination rates, proving that cash equivalents are powerful motivators for civic action (18).
24. The Q1 Redemption Wave
Restaurants see a massive influx of traffic in January, February, and March. Why? Because 40% of the gift cards sold in Q4 (Holiday season) are redeemed in Q1. This “gift card hangover” helps businesses stay afloat during the typically slow post-holiday months.
25. Planned Overspending
Ninety percent of consumers plan to spend more than the card’s value. It’s simple psychology: if you have a $50 card, a $70 item feels like it costs $20. This behavior is projected to continue rising as inflation pushes prices higher (19).
26. US vs. The World
The United States currently holds about 38% of the global gift card market share. However, growth in China and the Asia-Pacific region is accelerating. As mobile payments (like WeChat Pay and Alipay) dominate the East, digital gifting integration is seamless and expanding rapidly (20).
27. Closed-Loop vs. Open-Loop
“Closed-loop” cards (valid only at one store, like Starbucks) still dominate volume, but “open-loop” cards (Visa/Mastercard gift cards) are gaining traction for their flexibility. The prepaid card market is set to hit $21.7 billion by 2027 as consumers use them for budgeting and allowance tools.
28. Future Projections
The U.S. gift card industry is on track to hit $700 billion in revenue by 2030. Drivers include the rise of gaming gift cards (Roblox, Fortnite V-Bucks), which act as a primary currency for Gen Alpha and Gen Z (21).
29. Top Retailers
Amazon consistently ranks as the most popular gift card, largely due to pure utility and zero shipping fees. Other top contenders include Walmart, Target, and major food chains like Chick-fil-A. The pattern? Convenience wins over niche appeal (22).
30. B2B Expansion
It’s not just consumers buying cards. Businesses are expected to increase their gift card spending by 23% by 2025. They are used for employee retention, customer apologies, and sales incentives. The corporate gifting sector is becoming a massive pillar of the industry.
How Much Do Consumers Waste in Unused Gift Cards Each Year?
The number is staggering. Forty-seven percent of U.S. adults have at least one unused gift card, totaling $21 billion in lost value nationwide. Whether the card is lost, the store closes, or the user simply forgets, this “breakage” is essentially free profit for retailers. Check your drawers, you likely have free money gathering dust right now (23).
FAQs
How Big Is the Gift Card Industry?
The global gift card market was valued at approximately $885 million in 2021 and is on a trajectory to hit $2.3 trillion by 2030. The industry is growing at a compound annual growth rate (CAGR) of over 12%, driven largely by the shift to digital gifting and corporate incentives (24).
Do People Prefer Digital or Physical Gift Cards?
It is a split demographic. While 54% of consumers still prefer giving physical cards for the “unwrapping” experience, digital adoption is growing rapidly. Younger generations (Millennials and Gen Z) overwhelmingly prefer digital cards for their instant delivery and mobile wallet integration.
What Happens If a Gift Card Is Never Used?
If a card goes unused, the retailer typically keeps the funds. This is known in the industry as “breakage.” Under the Credit Card Act of 2009, gift cards cannot expire for at least five years from the date of issue. However, inactivity fees can sometimes be applied after one year of non-use depending on state laws.
Can a Gift Card Be Traced?
Yes and no. Open-loop cards (like Visa or Amex prepaid) are tracked via credit networks and can often be traced if registered. Closed-loop store cards are harder to track once purchased with cash. This anonymity is why scammers frequently demand payment via gift cards (25).
What Is the Most Popular Gift Card in the USA?
Amazon takes the crown. It consistently ranks as the most desired and purchased gift card due to its versatility and ease of use. Other top performers include Visa prepaid cards, Walmart, Target, and Starbucks cards.
