Shoppers Turn to Gift Cards for Easy, Budget-Friendly Gifting

Gift cards are set to make up nearly half of all holiday spending this year. Shoppers are looking for easy ways to check off their gift lists while dealing with tighter budgets. Blackhawk Network's yearly holiday forecast says consumers plan to spend 48% of their total holiday budget on gift cards - a big jump from 39% in 2023.

Younger shoppers are leading the charge. Gen Z and millennials plan to spend over half (54%) of their holiday cash on gift cards, up from 41% last year. They're likely buying more gift cards because they go to more gift exchanges with their friends. On average, Gen Z and millennials expect to purchase 19 gift cards (12 physical and 7 digital). Older generations are planning on just 15 (9 physical and 6 digital).

But gift cards aren't the only way shoppers are trying to get more value for their money. Plenty of people are turning to loyalty programs and even AI to power their purchases. Close to half of shoppers surveyed said they'll change their shopping habits to focus on deals and value. Among Gen Z and millennials, 43% plan to use store or credit card points to buy gifts. Another 26% will redeem loyalty points from places like hotels and airlines.

About one in five shoppers said they'll use AI to compare products, find the best deals, and come up with gift ideas. "As shoppers adopt increasingly strategic approaches to holiday budgeting and spending, our annual holiday forecast helps retailers to better understand and leverage consumer trends," said Jay Jaffin, chief marketing officer at Blackhawk Network. This lets retailers "maximize resources and hone marketing and gift card program strategies for holiday success."

Overall, holiday gift spending is holding steady at $760 compared to last year, but it's clear that gift cards will be the go-to choice for savvy shoppers looking to simplify their shopping and stretch their dollars this season.