Retailers are experiencing benefits from participating in open loop, multi-store prepaid gift card schemes. These schemes allow consumers to redeem gifts in a variety of stores nationwide, giving retailers access to the £5 billion gift card market and potential increased sales. As consumer spending shifts away from high streets, gift cards provide incentives for shopping occasions. The gift card market has grown to £5 billion annually, with fastest growth in multi-store cards. Younger, female, higher income consumers most likely to receive and spend gift cards. Retailers see additional 40p spent per £1 loaded on gift cards due to top-up spending and increased patronage. Fashion sector experiences highest growth but wide variety of sectors benefitting.

1. SAVING THE HIGH STREET
How Retailers Can Harness
The Growing Power of Prepaid Gift Cards

2. INTRODUCTION
Many UK retailers are beginning to experience the positive impact on their
bottom line of signing up to open loop, multi-store prepaid gift
card schemes, allowing consumers the opportunity to redeem their gift in a huge
variety of stores nationwide.
As a retail partner within these schemes, stores have access to a share
of a market that is now worth £5 billion annually, as well as potential
uplifts in sales generated by top-up spending and by having new
customers introduced to their stores.
This is helping many high street brands to fight back against the erosion of consumer
spending. With the share of money spent on the high street falling each year – from
49% in 2000 to a predicted share of 39% this year – multi-retailer gift cards provide
an incentive to make shopping an occasion and remind consumers of the pleasure to
be gained from browsing stores in order to treat themselves.
In this report we have provided a detailed breakdown of the current
nature of the gift card market, the facts about the benefits that it brings and how
retailers are capitalising on the opportunity offered by this growing market.

3. The Continued Rise of Prepaid Gift Cards
The prepaid gift card market has enjoyed continued growth over recent years and is
now worth an estimated £5 billion annually.
Within this market the fastest growth has come from cards that can be used in
multiple outlets across the high street, and during last Christmas alone sales of such
cards increased by over 30% year-on-year.
Such cards are often preferred because they give the recipient an almost
unlimited choice of the type of present they can buy for themselves, from fashion,
toys and electrical items through to DIY for home improvements and travel. Greater
availability and choice has also helped to make gift cards a more attractive option,
available from most large retail chains, supermarket outlets and 11,500 Post Offices,
as well as online.
Personalised printing also means that online orders can provide cards featuring
photographs or personalised messages, making them a more appealing gift than
ever before.
Businesses also contributed to the boom in gift card sales, with many using them
as rewards or bonuses for staff. In 2014, 50% of sales for gift cards came from
businesses, ranging from large corporates employing thousands of staff to small
businesses with just a handful.

4. Prepaid Gift Cards and the Modern Shopper
The preference for flexibility and choice
Today’s shoppers are motivated by choice and flexibility – they are living in an age
where they expect instant access to information, entertainment and news and are
less willing to accept restrictions being placed on how they shop.
A consequence of this has been the increasing shift to the more flexible open-loop
gift cards that allow them to choose not just from a range of stores. From fashion
and electronics to holidays and DIY, multi-store gift cards – this choice is appealing
to today’s customers.
Therefore, retailers who limit themselves to single brand, closed loop cards are
missing out on an increasing share of customers.
In a recent consumer survey, 57% of consumers said that they would show a clear
preference for open loop cards, compared to just 7% preferring a single brand option.
This message is getting through to gift-givers, causing the rapid growth of this style
of gift card.

5. 10
20
30
40
50
60
70
80
90
100
1.3
6.6
34.6
47.8
9.6
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
Prefer “Open” Cards to Traditonal Retailers Cards
Percentage

6. Which shoppers do gift cards bring into stores?
Gift card shoppers (the recipients of gift cards) are statistically most likely to be
younger (under the age of 35), female and from higher-income households.
Evidence suggests that such cards are given to people that will enjoy shopping,
further increasing their value to retailers looking to win their regular custom. They
are likely to be shoppers that treat themselves on a monthly basis and to describe
themselves as impulse buyers.
In terms of how they use their gift card, shoppers typically fall into three camps:
• Delayed gratification shoppers (40% of gift card shoppers): this group will hold onto their gift card
to ensure it is spent on a special treat rather then it going on something they would normally buy.
As a result, there is possibly a greater potential for top-up spending and for this group to venture
into new retailers that they might not normally visit.
• Guilt-free shoppers (53% of gift card shoppers): this group use their card to satisfy their
immediate wants, treating themselves without having to worry about the consequences. Again,
such an attitude lends itself to people topping up – upgrading their purchase to an item that they
wouldn’t normally think acceptable for them to buy.
• Dippers (7% of gift card shoppers): this group will spread their gift card spending between shops
and may also take quite some time to use its full value. This group are often on the look out for
little luxuries, smaller purchases that might normally deny themselves, but can buy from time to
time to give themselves a boost.
That is not to say that other demographic groups aren’t well represented within this
audience, and retailers looking to appeal to older or male shoppers will still be well
served by gaining access to people treating themselves with gift cards.

7. 10
20
30
40
50
60
70
80
90
100
<35 35-65 >65
Receipt by Age Receipt by Sex
<£15k £15-£30k >£30k
Receipt by Income
Percentage
60.7
39.3
49.6
50.4
33.3
66.7
42.4
54.1
57.6
45.9
40.3
59.7
53.3
46.7
62.5
37.5
Males Females
Yes No Yes No Yes No

8. The Hidden Gains from Gift Cards Shoppers
As well as gaining from the amount loaded onto the gift card itself, retailers can also
expect an additional bonus thanks to top-up spending and increased patronage.
In the UK, for every £1 loaded onto a gift card, retailers can expect to also see an
additional 40 pence spent in store, as people spending gift cards top up their
spending to buy themselves a treat.
This is backed up by further research into the attitudes of gift card shoppers, with
shoppers most likely to use a gift card as an excuse to buy something really special
(37% of gift card shoppers).
In effect, this means that the true value of gift cards market to retailers is nearer
£7bn each year when factoring in this top up effect.
There are also substantial gains to be made from increased patronage.
Research shows that there are a substantial number of shoppers who will use gift
cards as an excuse to shop in a new store or a store that they wouldn’t normally visit
(5% of shoppers).
Recipients of gift cards also report that once they’ve visited a store to spend a gift
card, 32% agreed that they were more likely to visit that store again in future weeks,
creating a substantial number of regular, repeat shoppers.

9. 10 20 30 40 50 60 70 80 90 100
Fashion
Percentage
Beauty products or treatments
Electrical Items
Dining out
Hotel Break
Music & Entertainment
Books
Technology
Groceries
Jewellery
Family day out
Sport and Fitness
Travel
Gardening
Motoring
Charitable organisations
Where Gift Card Shoppers Expect To Spend Their Gift
Which Types of Stores Are
Winning?
The fashion sector is experiencing the highest
growth in value from gift cards shoppers, but there
are a wide variety of other sectors that are also
benefitting.
This highlights the wide variety of uses that
shoppers put their gift cards towards, and the
opportunities that exist for all kinds of businesses.
As the market continues to grow, the scale of these
opportunities increases – and as will the breadth
of ways in which shoppers will consider using their
gifts.

10. “Being in the One4all scheme has certainly helped generate extra turnover in our stores across the UK. We have accepted One4all vouchers
and more recently the gift card since they started in the UK, and every year it has got better and better! One4all consistently
brings extra turnover to our business in the UK.”
David Hibbert, Gift Card Manager - River Island
“Since confirming our acceptance of the One4all Gift Card in 2012, their gift card has delivered a strong volume of incremental
sales for our Currys PC World stores year in year out.”
Glenn Sizer, Partnership Manager – Prepaid Dixons Retail, DSG (Currys, PC World)
“One4all Gift Cards have provided our customers easy access to over 35,000 products, and have become a key payment method within Argos stores.
The gift cards offer customers the luxury of choice and convenience, whether used by the purchaser themselves or gifted
as a treat to others; underlined by their increasing popularity amongst customers.”
Nicki Rogers, Strategic Partnership Manager - Argos