Consumers in the United States are turning to gift cards to keep holiday shopping on budget, while using loyalty points and promotions to make their spending go further, according to research from Blackhawk Network.
The global branded payments and gift card provider added that artificial intelligence is starting to influence where people spend.
In its annual study of U.S. holiday shoppers, Blackhawk found that 82% of consumers are setting a holiday budget, with gift cards playing a significant role in their plans. Among shoppers setting a budget, Blackhawk noted, 93% plan to buy gift cards.
Shoppers participating in the Blackhawk survey intend to spend an average of $721 on holiday gifts, down 3% from last year’s pre-holiday poll. Blackhawk noted that pressure is greatest among households earning less than $40,000, where planned gift spending fell 13%.
Lower-income shoppers are allocating a larger share of their holiday gifting budgets to gift cards, which account for 36% of planned gift spending among shoppers with household incomes under $40,000, compared with 29% among those earning $80,000 or more.
Convenience is a main consideration for shoppers choosing gift cards, Blackhawk stated. Ease of sending is the leading reason survey respondents cited for buying gift cards this holiday season, followed by giving recipients the freedom to choose their gifts.
With grocery and food prices the leading economic concern among respondents, cited by 58% of those surveyed, tight budgets favor open-loop gift cards such as those from Visa and Mastercard, preferred by 74% of younger shoppers and 61% of older shoppers. Other desired gift cards include those from grocery store operators (42% of respondents), mass merchants (33%) and gas and EV charging (24%). Among younger shoppers, 17% want subscription-service gift cards for streaming and music, among other categories.
Half of respondents said they plan to redeem most or all of their loyalty points for holiday shopping, Blackhawk pointed out, with 61% of younger shoppers and 55% of older shoppers surveyed using loyalty points for gift cards. Among those shoppers, 70% intend to give the gift cards they purchase with redeemed points to someone else.
As for artificial intelligence, 40% of consumers polled said they would click a promotional link if AI recommended a gift card promotion, and one in five would buy without doing additional research. The findings suggest that, for some consumers, AI is moving beyond product discovery and closer to the transaction, Blackhawk observed.
“AI is shaping what consumers see and consider before they ever reach a retailer’s website,” said Talbott Roche, Blackhawk CEO and president. “That puts more importance on making offers easy to find, understand and act on. As AI becomes embedded in the shopper journey, accurate product information, clear value and a simple path to purchase will matter even more.”
Brett Narlinger, Blackhawk chief revenue officer, added, “With everyday costs putting pressure on holiday budgets, shoppers are being more deliberate about how they spend. They’re putting loyalty points, promotions and other value they’ve already earned toward holiday purchases, while also thinking more carefully about how much they spend on each gift. Gift cards help with this by letting shoppers set a clear amount while giving the recipient flexibility over how to use it.”
