Growth of more than 100%! Gift cards become the new favorite of North American e-commerce

Sales of digital gift cards have increased throughout the pandemic and surged during the 2020 holiday season. According to survey data from 1,528 U.S. retailers by Recombination Software, an American artificial intelligence company , the number of digital gift cards sold by U.S. retailers in November 2020 increased by 25.0% year-on-year, and increased by 106.1% year-on-year in December 2020.

But the data doesn't include Amazon gift cards and multi- store gift cards, which can be used at more than one store . For example, a parent company like Gap could offer one gift card that can be used at Gap , Old Navy and Banana Republic.

In December, the average retailer sold 30,774 digital gift cards.

Yair Miron, CEO and founder of Rise.ai, said that while the fourth quarter is traditionally the strongest quarter for gift card sales, the impact of the epidemic on consumer behavior led more consumers to purchase the product during the holiday season.

“Due to the U.S. election and COVID-19’s impact on global supply chains, 2020 holiday shipping deadlines were earlier than in previous years, so consumers took advantage of digital gift cards to make last-minute purchases,” Miron said.

In December 2020, retailers generated an average of $2.6 million in revenue from digital gift card sales, an increase of 121.1% from the $1.2 million in digital gift card revenue they generated in December 2019.

According to survey data, gift cards have accounted for a larger share of merchants' total revenue throughout the pandemic. For example, in July 2020, 2.63% of merchants' total revenue came from digital card sales, compared to 1.17% in July 2019.

Due to concerns about contracting the coronavirus, consumers are avoiding in-store shopping and paying with cash. Purchasing gift cards is also a way for consumers to support local businesses during the pandemic. According to Rise.ai, more and more companies are also giving gift cards to employees to help small and medium-sized enterprises through the financial crisis.

As a result, gift card sales account for a larger share of a merchant's total revenue.

North American e-commerce

Gift Cards

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