Merchant-branded gift cards for quick-service restaurants and specialty stores experienced significant gains in the first half of 2010, according to a new report from First Data Corp.
First Data’s quick-service restaurant partners experienced a 14% increase in the dollar value of gift cards sold between January and June. The Atlanta-based payments processor did not reveal specific numbers.
Michael Hursta, vice president for gift cards at First Data, attributes the growth in part to loyalty programs associated with gift card programs. For example, a consumer may receive a discount or extra funds loaded onto the card after purchasing or reloading a card, he says.
The number of quick-service gift cards activated increased 12.4% compared with the same period last year. The average card amount increased 1.4% to $13.45 from $13.27.
Specialty retailers saw a 10.3% increase in the dollar value of gift cards sold between January and June. Activations in this category increased 5.3%.
Specialty retailers also experienced the largest increase in terms of the average amount per gift card. The average card amount increased 4.8% to $51.36 from $49.01 in 2009. Consumers likely purchased many more $100 cards to help carry the average over $50, Hursta tells PaymentsSource
“It’s too early to tell if that trend will continue,” he adds.
The specialty retail category includes merchants that sell goods such as books, electronics, hardware and music, among others.
The casual dining sector saw a 4.7% increase in the dollar value of gift cards sold. The number of activations in the category increased 6.1%. The average gift card amount decreased 1.2% to $28.54 from $28.90.
Hursta believes gift card sales could increase as much as 5% in the second half of the year based on activity during the first six months of 2010.
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