Gift Cards’ Appeal to Millennials

Gift cards are exceedingly popular with Millennials, as new research from the Wharton School’s Baker Retailing Center and The NPD Group found. Here is fresh insight as to why:

A study on generational shopping behavior by the Wharton School’s Baker Retailing Center and The NPD Group found that, based on customer receipts, gift cards are particularly popular with Millennials. Their share of wallet of gift cards is higher than that of other age groups at mass merchants, convenience stores, and warehouse clubs.

What could be driving Millennials’ preference for gift cards? Making up one-third of the U.S. population, Millennials are the largest and youngest shopper generation and will continue to be an important segment for gift card purchases. Thus, understanding the drivers of Millennials’ liking of gift cards may be useful.

To be sure, gift cards have become more popular with consumers in general. Sales in the U.S. have grown gradually over the past several years, reaching record sales of an estimated $130 billion last year, an increase of more than six percent from 2014, according to an annual study by CEB. For nine years in a row, gift cards were the most requested gift during this past holiday season, as a survey by the National Retail Federation (NRF) found, and almost three-quarters of respondents were planning to buy at least one gift card. One in six Americans received a Starbucks gift card during the 2015 holiday, an increase from one in seven in 2014. Further growth is expected, which retailers will welcome since gift cards generate store traffic, online and offline, including from new customers. Plus, most gift card users spend above the card’s face value.

This preference for gift cards as well as cash as gifts — a 2014 holiday survey by Deloitte found cash to be the second-most desired gift (35%), closely trailing gift cards (37%) — should also please economists since gift cards reduce or eliminate the loss that occurs when people give gifts that cost more than recipients value them. Joel Waldfogel coined the term “deadweight loss of Christmas” for this economic waste.

Continue reading for a list of factors that may contribute to gift cards' popularity with Millennials.

Denise Dahlhoff, PhD, is the Research Director of the Wharton School’s Baker Retailing Center, a research center in the retail, fashion, and e-commerce space.


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TAGS:   card services, Gift Card Services, trends


Gift Cards Become the Latest Tool to Help San Francisco’s Homeless

The latest tool to help the homeless? Gift cards.

HandUp, a public benefit corportation that helps homeless people pay for things they need by creating an online account for them that donors can contribute to and check progress on, has designed gift cards that can eventually be redeemed for everything from clothes to food to bus passes. The cards also get the individual into the system for longer term services.

In late August, HandUp rolled out the program in which donors can pay for $25 gift cards to give to homeless people that they or others encounter on the streets.

“Our donors have been asking to be able to give to someone on the street. They want to help them,” said Rose Broome, the cofounder of HandUp.

So, why not just give cash?

“People don’t feel comfortable giving a lot of cash on the streets, and that comes from a concern that people want to make sure they’re helping and not hurting someone,” said Broome. “It gives flexibility, the donor knows that the funds are going toward something productive and beneficial.”

The gift cards aren’t immediately redeemable at a store, but require the recipient to go into the Project Homeless Connect office. There they can exchange the card for a gift card valid at a retailer such as Safeway, Subway or Goodwill, make payments on bills or buy transit passes. The cards cannot be redeemed for cash.

And that matters, at least to Christopher Davis, a homeless man whom HandUp volunteers encountered on an outreach trip to Shotwell and 17th streets last Friday. 

“I would rather they hand me something that can’t be traded,”  said Davis who said there are already established methods of illegally obtaining alcohol or cigarettes with food stamps and other government assistance, often at as much as “50 cents on the dollar.”

Davis, who said that he smokes and drinks, said he is mindful of the intention behind the new gift cards.

“I do have a belief that it is for services, not alcohol or drugs,” he said. “Even if I had an opportunity to go through sources that I know, I wouldn’t do it, because the intention is to spend it on certain things.”

Other recipients thanked the volunteers but asked few questions and while they were enthusiastic, they were also confused about where they needed to go to redeem the card.

Katrina Belda, community and support liaison for HandUp, helped test the card system before the release. She said while reactions were mostly positive from those who got cards, many were skeptical. They couldn’t believe someone would just hand them $25, or thought there must be a catch. Which, in a way, there is – ease of redeeming them.

“It’s definitely useful,” said Freddie Wright after receiving a gift card on 16th and South Van Ness during the outreach trip. Wright is hoping to get some new clothing. With a gift certificate to Goodwill, he will be able to do that.

But the mandated trip to the Project Homeless Connect headquarters to redeem the card, he said, is “kind of a hassle.”

“I mean, if you’re giving us the gift card, let me go do what I want with it,” he said.

But the detour to the office is actually one of the main purposes of the gift cards – to get homeless people into the system and connected with longer-term services.

“It often takes more than one or two tries, but we’re really seeing this as this new and powerful tool to get folks who weren’t engaging to engage,” said Emily Cohen from Project Homeless Connect. “They come in during drop in hours and meet with resource specialists.”

Nobody who receives a gift card is required to sign up for HandUp services, but it’s one of the goals of the program.

During the testing stage, Belda said what worked best to get people to actually redeem the cards and come in to the service center was to have homeless clients already in the system hand out cards to their friends and acquaintances, perhaps relieving some suspicion.

Bevan Dufty, who leads the city’s work to address homelessness, said he is hopeful that the gift card program will be expanded to include partnerships with a wider variety of stores, like Target, to increase the options available to gift card recipients.

“In this work you’ve got to let the people on the street guide us, and you’ve got to let the donors guide us,” he said. “I’m not going to be the one to tell you it’s perfect, but we should absolutely try it.”


Source: Mission Local
Article by Laura Wenus
To learn more about HandUp, visit their website at

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TAGS:   Community, Gift Card Services