Scott Carlson reports on the growth in popularity of gift cards.
Nearly nine out of 10 Twin Cities’ shoppers plan to give gift certificates, including gift cards, as a part of their holiday spending this year, according to survey released this week by the University of St. Thomas Institute for Retailing Excellence.
The phenomenon of retail gift cards has exploded in the past three to five years, said Jim Nelson, a marketing manager at Datacard Corp., a Minnetonka-based designer of custom gift cards and maker of data-card equipment. Americans spent about $20 billion on gift cards in 2000; this year that figure could reach $50 billion, according to industry sources.
Although buyers can have retailers load the little plastic cards with as little as $5, the average gift-card value is $60 this year, up from $51 a card a year ago, according to a survey from Denver-based First Data Corp.
First Data Corp.’s ValueLink is a leader in providing gift card solutions to retailers. More recently, the major card brands (Visa and American Express) have also gotten into the business of gift cards. Those cards work at many different merchants — but also have hefty fees ($5.95-$11.95 depending on card amount and how you order) associated with them as compared to the single retailer gift cards.