Closed-Loop Gift Card Loads Fell in 2015 as Shoppers Favored Merchandise

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New research from Mercator Advisory Group finds U.S. retail gift card loads fell 9% in 2015, in part due to a slow holiday season

Boston, MA — August 23, 2016 — Mercator Advisory Group’s new research report, Retail Gift Card Trends in the United States: 2015 in Review, documents the dollars loaded in 2015 onto closed-loop prepaid cards or prepaid account access devices issued by retailers. The double-digit gift card load growth in 2014 was not sustained as retailers focused on convincing shoppers to favor merchandise with discounts and sales.

In the past, Mercator Advisory Group published distribution information for prepaid cards as a separate report. The new report includes distribution information along with load information for retailer-issued cards. 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.

“Closed-loop gift cards continue to be popular for retailers and their customers, but retailers have steered customers toward buying goods,” said Ben Jackson, the Director of Mercator Advisory Group’s Prepaid Advisory Service and author of the report. “Despite downward pressure in 2015, the closed-loop gift card market has opportunities to rebound as retailers learn new ways to make use of their branded currencies.”

Highlights of the report include:

  • The closed-loop, In-Store gift segment declined in 2015 after seeing near double-digit growth through 2014.
  • Issuers reported growth in the Employee and Partner Incentives segment, since that was the only retailer-issued segment that saw growth in 2015.
  • Loads in the Consumer Incentives segment declined in 2015 as the emphasis seemed to shift in the incentives market.
  • This report also includes information on the distribution channels used by issuers. Retailers continue to see steady load volumes through card malls, business-to-business, and their own websites.
  • Reported virtual card load volumes continue to take an increased share of the total dollars loaded onto closed-loop, retailer-issued cards.
  • Reloads as a percentage of total volume remain above 10%.

One of the 12 exhibits in the report:

Prepaid Chart

This report contains 17 pages and 12 exhibits.

Members of Mercator Advisory Group Prepaid Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.

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About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world’s largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors.

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