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The U.S. Prepaid and Gift Card Market


Attention: There is an updated edition available for this report.

In our new report, The U.S. Prepaid and Gift Card Market, Packaged Facts assesses the growth and diversification of the consumer gift card market, which the report estimates at $35.3 billion in 2005. Gift cards have moved to the forefront of the consumer purchasing experience: approximately two thirds of consumers bought gift cards in 2004, and they comprise consumers’ top holiday purchase.

To shed light on market dynamics, our report closely analyzes consumer gift card demographics, such as age, gender, and income—and detail where the multi-faceted consumer is both purchasing and using gift cards. To thoroughly analyze gift card consumer behavior patterns, the report relies on more than 20 demographic tables.

The report also assesses emerging trends and market drivers, such as gift card kiosks, multi-channel distribution, changes at the point of sale, and redemption patterns—and, from a competitive standpoint, closed loop store cards and open looped back cards. The report also thoroughly assesses the current legal and regulatory situation, with information on every state in the U.S. In addition, the report discusses important trends outside the consumer landscape, such as corporate and customer gift incentive programs.

Additionally, the report examines the recent proliferation of the gift card market as well as current gift card trends in the retail, restaurant, experiential, gasoline and online spaces. In doing so, we provide market size and growth estimates, and report on the ways businesses use gift cards, and how they market them to consumers - which, in turn, leads to a thorough assessment of gift card consumer behavior patterns.

Report Methodology
The information in The U.S. Prepaid and Gift Card Market is based on both primary and secondary research. Primary research involved interviews with marketing, public relations and industry analysts within the banking, retail and credit card markets and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature.

What You’ll Get in this Report
The U.S. Prepaid and Gift Card Market makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that The U.S. Prepaid and Gift Card Market offers.

Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

How You Will Benefit from this Report
If your company is already doing business in the gift or prepaid card market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for gift cards, as well as projected markets and trends through 2010.

This report will help:

  • Marketing Managers identify market opportunities and develop targeted promotion plans for prepaid and gift cards.
  • Research and development professionals stay on top of competitor initiatives and explore demand for prepaid and gift cards.
  • Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to use their services.
  • Business development executives understand the dynamics of the market and identify possible partnerships.
  • Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.


  • Introduction
    • Gift Cards: An Introduction
    • Why Do Consumers Like Gift Cards?
    • Why Do Merchants Like Gift Cards?
    • Data Mining
    • Efficiencies
    • Store Versus National Gift Cards (Closed vs. Open Looped)
      • Table 2004 Holiday Gift Card/Gift Certificates Received, by Type: Store, National, Restaurant (%)
    • Variants to Closed and Open Loop
    • Bank Card Positives
      • Table 2004 Holiday Gift Card/Gift Desirability: Consumer Response, by Type: Store, National, Restaurant (%)
      • Table 2004 Holiday Gift Card/Gift Desirability: Store, National, Restaurant, by Age
    • Bank Card Negatives
      • Cross Selling May Not Materialize
      • Fees
      • Case Study: American Express
      • Give The People What They Want
      • Travelers Check Card
      • American Express Gift Card
      • Securing an Advantage over the Competition
      • High Customer Satisfaction, Repeat Business, and Continued Expansion
      • Overall Company Benefits
      • Room to Grow
      • AMEX Mall Card
  • Gift Card Market Drivers
    • Positive Market Drivers
      • Gift Card Sales Are Extending Into New Sectors
      • Kiosks
      • Expanded Online Gift Card Sales, Redemptions
      • Point-of-Sale Activation
      • Restaurant POS Systems Adding Gift Card-Enabled Features
      • Loyalty Function Can Be Integrated
      • Teen Buying Power
      • An Insatiable Appetite for Gift Cards
      • Quick Spenders
      • Year-Round Buyers
    • Negative Market Drivers
      • Fees on Gift Cards Deter Consumers
      • Legal and Regulatory Battles Create Instability for Issuers, Merchants
      • The Simon Property Group Case
      • Fraud
      • Gift Card Scams
      • Close to Home: Employee Theft
      • Professional Thieves and Identity Theft
      • Target Gets Hit with Scam, Then Hits Back
      • Online Fraud
      • Shoplisting
      • Gift Card Theft Prevention
      • Employee Theft Prevention Tactics
      • Limiting Cash Loss Gift Card Amount and Usage Limits
      • Exception Reporting: Creating a Gift Card Audit Trail
      • K-Mart Closes the Gap on Gift Card Fraud
    • Market Size & Growth Forecast
      • Table Holiday Season Gift Card Growth: 2003-2005
      • Table U.S. Consumer Gift Card Purchases & Use: 2001-2005
      • Table U.S. Gift Card Market Volume: 2005-1010
  • Distribution Summary And Trends
    • Table Most Desirable Cards by Redemption Category, 2005
    • Table Most Desirable Cards by Redemption Category, by Gender, 2005
    • Table Most Desirable Cards by Redemption Category, by Age, 2005
    • Table Most Desirable Cards by Redemption Category, by Income, 2005
    • Table Most Desirable Cards by Redemption Category, by Region, 2005
    • Restaurants
      • Table Dining Gift Card Desirability
      • QSR In-Store Kiosks Accepting Gift Cards
      • Restaurants Integrating Gift Cards With Loyalty
      • Third-Party Relaters New Revenue Stream for Restaurant Gift Cards
      • McDonald's Launches Reloadable Arch Gift Card
      • Subway
      • Regional Players Move to Gift Cards
      • Most Pizza Chains Slicing Up Gift Card Profits
      • Reloadable Multi-Brand Gift Cards
      • The Restaurant Industry and Escheat Laws
    • Starbucks: A Gift Card Industry Leader
      • Table Starbucks Prepaid Cards Activated: 2001-2004
      • Strong Customer Service
      • Service Fees Eliminated
      • Banks, Third-Party Vendors Capitalize on Starbucks' Name
      • Make-Up Cards
    • Supermarkets, C-Stores and Gas Outlets
      • Expanding Already-Existing One-Stop Shopping
      • Credit Card Processing Technology Helps Fuel Cheaper Gift Card Solutions
      • Safeway Leading the Way
      • Convenience Stores and Gasoline Retailers Capitalize on Gift Cards
      • The Oil Giants Tap Gift Card Space
      • Shell Oil Gift Card Program
      • Chevron/Texaco
      • A Gas-Retail Teaming to Watch: Murphy Oil Teams with Wal-Mart
      • 7-Eleven Pushes the Envelope by Unveiling Dedicated Gift Card Center
    • Gift Cards and Kiosks
      • Kiosks Gaining Traction at Convenience Stores
      • Gift Card Kiosks and Readers Infiltrating Malls
      • Coinstar Kiosks Available at Malls and Supermarkets
      • Amazon to Issue Gift Receipts at Coinstar Kiosks
      • Gift Card Exchanges Now Teaming With Retailers
    • Book Sellers
      • American Booksellers Association's Book Sense Gift Card Program
        • Table Book Sense Gift Card Participants, Sales, and Average Sale per Gift Card: 2003–2004
      • Legal Issues
      • The U.S. Postal Service
    • Corporate Gift Cards
      • Corporations Increasingly Use Gift Cards
        • Table Key Reasons for Choosing Gift Cards the Most as Incentives
      • Wal-Mart Enters the Fray
      • Gift Card Processor Targets Small Businesses
      • Software Solution May Help
    • Customer Incentives
    • The Online Channel
      • The Internet and E-Commerce: An Ever-Increasing Marketplace
        • Table Sources for Gift Shopping, by Age
      • More Gift Cards Being Bought, Spent Online
  • Seasonal and Event Trends
    • 2004 Holiday Season Recap
      • Holiday 2004 Results
      • Not Just a Passing Fad
      • Financial Institutions Join the Fray
      • Discover Card
      • Post-Holiday Gift Card Redemption Patterns
      • Maximizing Holiday Gift Card Profits
      • Gift Card Redemption Campaigns
      • Another Solid Holiday Gift Card Season Predicted for 2005
        • Table Top Occasions to Receive Gift Cards, 2005
        • Table Top Occasions to Receive Gift Cards, by Gender, 2005
        • Table Top Occasions to Receive Gift Cards, by Age, 2005
        • Table Top Occasions to Receive Gift Cards, by Income, 2005
  • The Consumer
    • Teen Buying Power: The Group That Potentially Keeps On Giving
      • Teen Spending Habits
      • An Insatiable Appetite for Gift Cards
      • Quick Spenders
      • Discerning, Year-Round Buyers
      • The Visa Buxx Card
      • The Internet and E-Commerce: An Ever-Increasing Marketplace
      • Online Buying Favored Over Catalogs
        • Table Sources for Gift Shopping, by Age
        • Table Gift Card Preferences, by Age: Store, National, or Restaurant
    • Holiday Gift Card Analysis by Age, Gender, and Income
      • Consumer Gift Buying Plans
        • Table Types of Gifts Consumers Plan to Buy: 2003 Holiday Season, by Age
        • Table Types of Gifts Consumers Plan to Buy: 2004 Holiday Season, by Age
        • Table Gifts Consumers Plan to Buy: 2005 Holiday Season, by Age
        • Table Adults Planning to Purchase at Least One Gift Card: 2004 Holiday Season, by Age
        • Table Adults Planning to Purchase at Least One Gift Card: 2005 Holiday Season, by Age
      • Number of Gift Cards Purchased
        • Table Number of Cards Purchased: 2003 Holiday Season, by Age
        • Table Number of Cards Purchased: 2004 Holiday Season, by Age
        • Table Number of Cards Purchased: 2005 Holiday Season, by Age
      • Dollar Values of Gift Card Purchases
        • Table Money Spent on Gift Cards: 2003 Holiday Season, by Amount and Age
        • Table Money Spent on Gift Cards: 2004 Holiday Season, by Amount and Age
        • Table Money Spent on Gift Cards: 2005 Holiday Season, by Amount and Age
    • Gender & Income
      • Consumer Gift Buying Plans
        • Table Types of Gifts Purchased: 2003 Holiday Season, By Gender and Income
        • Table Types of Gifts Purchased: 2004 Holiday Season, By Gender and Income
        • Table Types of Gifts Purchased: 2005 Holiday Season
      • Adults Planning on Purchasing a Gift Card
        • Table Adults Planning to Purchase at Least One Gift Card: 2004 Holiday Season, by Gender and Income
        • Table Adults Planning to Purchase at Least One Gift Card: 2005 Holiday Season, by Gender and Income
      • Number of Gift Cards Purchased
        • Table Number of Cards Purchased: 2003 Holiday Season, by Gender and Income
        • Table Number of Cards Purchased: 2004 Holiday Season, by Gender and Income
        • Table Number of Cards Purchased: 2005 Holiday Season, by Gender and Income
      • Dollar Values of Gift Card Purchases
        • Table Money Spent on Gift Cards: 2003 Holiday Season, by Gender and Income
        • Table Money Spent on Gift Cards: 2004 Holiday Season, by Gender and Income
        • Table Money Spent on Gift Cards: 2005 Holiday Season, by Gender and Income
  • Accounting, Regulatory and Legal Issues
    • Gift Card Accounting Confusion
      • Gift Card Accounting Policies Affect Retailer Bottom Line
      • When to Treat Gift Card Proceeds as Revenue Creates Ambiguity
      • Profits from Gift Card Breakage Accrue on Balance Sheets
      • Other Retailers Carry Large Gift Card Carryovers
      • Book Sense Gift Card Financial Analysis
        • Table American Booksellers Association's Book Sense Profitability Analysis: Year One
        • Table American Booksellers Association's Book Sense Profitability Analysis: Year Two*
      • Fees on Gift Cards a Contentious Issue
      • Glossary of Common Gift Card Fees
      • Legal Wrangling Over Gift Cards
      • Six Major Legal Categories
      • The Simon Property Group Case
      • Three States Cry Foul
      • Bank Issued versus Mall Issued Gift Cards: The Feds Versus The States
      • National Bank Act Does Not Preempt State Law on Gift Cards
      • New York Joins The Fray
      • Judges Side with Connecticut, New Hampshire
      • Escheat
      • The Name Game: Whose Gift Card Is It?
      • Breakdown of State Escheat Laws
        • Table Summary of State Positions on Escheat: 2005
      • Changes in the FDIC Rule to Stored Value Card Insurance Protection Loom
    • State-by-State Legislation Regarding Gift Cards (2003-2005)
      • Alabama
      • Alabama Pending Legislation in 2005
      • Alaska
      • Alaska Pending Legislation in 2005
      • Arizona
      • Arizona Laws Enacted in 2005
      • Arkansas
      • California
      • Colorado
      • Colorado Pending Legislation in 2005
      • Connecticut
      • Connecticut Laws Enacted in 2005
      • Delaware
      • Delaware Laws Enacted in 2005
      • District of Columbia
      • Florida
      • Georgia
      • Georgia Laws Enacted in 2005
      • Hawaii
      • Idaho
      • Illinois
      • Illinois Pending Legislation in 2005
      • Indiana
      • Indiana Pending Legislation in 2005
      • Iowa
      • Kansas
      • Kentucky
      • Louisiana
      • Maine
      • Maine Laws Enacted in 2005
      • Maryland
      • Maryland Laws Enacted in 2005
      • Massachusetts
      • Michigan
      • Michigan Pending Legislation in 2005
      • Minnesota
      • Minnesota Pending Legislation in 2005
      • Mississippi
      • Mississippi Pending Legislation in 2005
      • Missouri
      • Missouri Pending Legislation in 2005
      • Montana
      • Montana Laws Enacted 2005
      • Nebraska
      • Nebraska Pending Legislation 2005
      • Nevada
      • Nevada Laws Enacted in 2005
      • New Hampshire
      • New Jersey
      • New Jersey Pending Legislation in 2005
      • New Mexico
      • New York
      • New York Laws Enacted in 2004
      • North Carolina
      • North Dakota
      • North Dakota Laws Enacted in 2005
      • Ohio
      • Ohio Pending Legislation in 2005
      • Oklahoma
      • Oklahoma Laws Enacted in 2005
      • Oregon
      • Oregon Pending Legislation in 2005
      • Pennsylvania
      • Pennsylvania Pending Legislation in 2005
      • Rhode Island
      • Rhode Island Laws Enacted in 2005
      • South Carolina
      • South Dakota
      • Tennessee
      • Tennessee Pending Legislation in 2005
      • Texas
      • Texas Laws Enacted in 2005
      • Utah
      • Vermont
      • Vermont Laws Enacted in 2005
      • Virginia
      • Virginia Laws Enacted in 2005
      • Washington
      • West Virginia
      • West Virginia Pending Legislation in 2005
      • Wisconsin
      • Wisconsin Pending Legislation in 2005
      • Wyoming

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