Happy Holidays for Gift Cards? Retailers Face Two Possible Gift Card Futures

For the past couple of years, Mercator Advisory Group has made its holiday gift card forecast available for free on PaymentsJournal, and we are pleased to do so again this year.

Mercator's holiday forecast of loads in the In-Store Gift Card segment of closed-loop prepaid cards predicts that the business will continue to grow. While most of the cards will be plastic, new distribution channels offer retailers new ways to engage customers.

Using information gathered as part of Mercator Advisory Group’s annual closed-loop prepaid cards benchmark survey, Mercator has created a forecast of the dollar amount that will be loaded onto gift cards that are sold in stores in the United States during the 2014 holiday shopping season. This forecast focuses solely on closed-loop cards sold by issuers in the United States to customers for use in their own stores.

"The holiday season will be critical for closed-loop issuers. Last year we saw a decline in gift card loads. What happens between now and the end of the year will determine the direction of the market," Ben Jackson, director of Mercator Advisory Group's Prepaid Advisory Service, and author of the research note, comments.

Members of Mercator Advisory Group's Prepaid Advisory Service have access to this research note as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.