Closed-Loop Gift Card Loads Grew in 2016 as Shoppers Returned to Cards

One of the 10 exhibits in the report

The closed-loop gift card market has opportunities to continue to grow as retailers learn new ways to make use of their branded currencies in omnichannel commerce.

Mercator Advisory Group’s new research report, Retail Gift Card Trends in the United States: 2016 in Review, documents the dollars loaded in 2016 onto closed-loop prepaid cards or prepaid account access devices issued by retailers. Gift card load growth returned in 2016 as consumers bought more cards, and retailers began to use more of them for incenting consumer behavior.

While no single factor accounts for the renewed growth of the gift card market, Mercator Advisory Group believes that e-commerce has likely played a role. Prepaid cards offer a source of good funds that can be sold and redeemed in every channel. They also offer a way to connect immediate value with customers and prospects through loyalty and incentives programs. These factors likely influenced gift card trends positively.

Except for load estimates, all the charts and tables in this report represent the average reported percentage of total loads, whether the cards were issued for direct-from-consumer loads or as incentives or other business-to-business purposes. The report covers information on form factors, average card loads, and reloads. Distribution information has been excluded from the report and will be explored in future research.

“Closed-loop gift cards continue to be popular for retailers and their customers,” said Ben Jackson, the Director of Mercator Advisory Group’s Prepaid Advisory Service and author of the report. “The closed-loop gift card market has opportunities to continue to grow as retailers learn new ways to make use of their…

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