Consumers are using gift cards and loyalty programs to beat inflation and manage holiday spending

While the holidays can spread cheer and brighten the shortening days of winter, inflation threatens to cast a shadow on this year’s holiday shopping season. With the global rate of inflation estimated at nearly 6% for 2024–just under the 2022 spike of 8.73%–participants in Clover’s Q3 2024 Gift Card Gauge are bracing for another pricey holiday season.

Here are 5 consumer observations and merchant takeaways to help you prepare for the 2024 holiday season. 

1. Shopping for the holidays sooner

Consumers know inflation doesn’t break for holidays. So, to combat rising sticker prices and the holiday rush, over 40% of shoppers have already started their holiday shopping. What’s more, just under half of those who’ve started their shopping are taking advantage of sales, promos, and discounts–think end-of-summer and back-to-school sales. Another 48% say they’re shopping now as they find gifts. 

Holiday spending is trending up for the third year in a row with one-third of consumers planning to spend more on holiday gift cards and gifts this year–up from 27% in 2023 and 21% in 2022. However, not all shoppers are rolling out the dough–about 14% of respondents are planning to spend less this year with two thirds of them blaming inflation and higher costs for their decreased spend. 

With consumers getting a jumpstart on shopping, spreading out their holiday purchases, or waiting to take advantage of holiday shopping events, there’s still opportunity a’plenty for merchants to cash in on these spending trends. 

Takeaway: Drive more sales this holiday season by identifying ways to help consumers get ahead of the holiday rush and stretch their dollars. Consider offering off-season or pre-holiday promotions, like Amazon’s July Prime Days or a Creepy Christmas promo in October.

2. Cashing in loyalty points for gift cards

Consumers appreciate being rewarded for loyalty. And showing your customers some love can pay back in repeat shoppers. In fact, at least 4 in 10 shoppers say they’ll choose to do their holiday shopping with retailers where they have a loyalty program membership. 

This year, consumers are especially interested in cashing in loyalty points for holiday purchases–for their loved ones or themselves. 42% plan to use points to buy holiday gifts with 46% hoping to maximize savings with points or rewards. What’s more, over half (52%) of respondents say they’ll use loyalty points to buy themselves a gift or gift card.  

More interestingly, 49% of consumers agree with this statement: “In today’s market a gift card is more valuable to me than a traditional gift.” That means merchants can likely boost the power of a well-oiled loyalty program with gift cards.

And, since consumers are almost split in their preference for discounts (42%) and gift cards (39%) in exchange for loyalty points, merchants should include discounts and gift cards as incentives in their loyalty programs. 

Takeaway: This holiday season, savvy merchants can influence consumer spending and trump the competition simply by offering a rewards program that makes it easy for customers to cash in loyalty points for discounts, exclusive benefits, and gift cards. 

3. Stretching budgets with gift cards

With prices going up, consumers are having to stretch their dollars further–and gift cards are taking center stage in their budgets and holiday planning. For starters, 1 in 3 shoppers are using gift cards for daily essentials, like groceries, food, and fuel, instead of luxury items. 

And, when it comes to holiday gifting, 42% of shoppers plan on purchasing gift cards to supplement their presents, about a third will use gift cards they’ve been given to purchase gifts, and just over a fifth plan to purchase high-value gift cards as the main present. 

Takeaway: Be creative with your gift card marketing. Remind customers they can be used for more than holiday gifts–they can be used for daily essentials throughout the year.

4. Motivated by gift card incentives 

Incentives can be a powerful tool for motivating shoppers–and gift card incentives are ranking high among the kinds of incentives shoppers prefer. 

Case in point, consumers say they’d be more likely to purchase gift cards when they’re rewarded for a gift purchase with a bonus gift card (50%), when their purchase is accompanied by free/discounted store merchandise (44%), or when they’re given a gift card as a bonus for shopping during a holiday event, like Black Friday (39%). Even better, 74% say they’d be interested in gift card-specific shopping events–think rewarding customers for store purchases made with only a gift card.

Takeaway: Boost gift card sales by incentivizing shoppers for their purchases with merchandise discounts and bonus gift cards–or by letting them choose the incentive they’re most interested in. And, be sure to remind customers to check their gift card balances. 

5. Expecting more gift card visibility

With more consumers appreciating and buying gift cards, merchants can maximize their in-store experience by prominently displaying gift cards. 

Where are shoppers looking for gift cards? Just over 40% of shoppers say they expect to see gift cards in a point-of-purchase display, 35% expect aisle displays, and 23% expect entrance displays. 

When it comes to purchasing gift cards online, 58% of shoppers say they’d find digital gift cards more convenient and appealing if they were more available on store websites. Further, consumers rank banner ads/landing pages on a store’s website, loyalty program notifications, and social media as the top three places they’d most likely be prompted to buy a digital gift card. 

Digital wallet use is also on the rise. A whopping 83% of shoppers surveyed say they could be swayed to store gift cards in a digital wallet if given a free gift card with gift card upload (39%), loyalty points (23%), early access to promotions (13%), and reminders for gift cards balance (9%).

Takeaway: Feature physical and digital gift cards prominently in your store, placing reminders about gift cards on your website, in your loyalty program notifications, and on social media. And, encourage shoppers to store gift cards and track balances in their digital wallets

Capitalize on early holiday traffic, boost shopper loyalty, and outrun the competition with Clover Gift Cards. Whether you’re building a new gift card program or revamping an existing one, Clover can help you learn how to accept gift cards and get your business gift-card ready for the holidays–fast. Contact us at 1-833-769-0144 or at support@giftcards.clover.com.

Editorial Team

Gift cards, Insights, Retail, Strategy

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