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by Alex Palmer | July 19, 2016
While incentive planners have seemingly endless options to choose from in their gift card awards, new research finds that the majority of gift card redemptions in loyalty and incentive programs come from just three categories. 

According to National Gift Card (NGC), fully three quarters of award redemptions are from: 
* Big box retailers (29 percent)
* Open-loop reward cards, such as VISA and American Express (23 percent)
* Entertainment, such as movie theater and iTunes cards (10 percent)

The findings were part of the mid-year gift card redemptions statistics released on July 14 by NGC, a B2B gift card solution provider, which partners with more than 450 gift card issuers for use in the U.S., Canada, Europe. The data is drawn from gift card purchases and redemptions made by NGC's thousands of corporate clients in the loyalty, rewards, and incentive market. 

Following the top three categories in terms of redemptions were cards in the categories of home improvement (6 percent), casual dining (6 percent), and department stores (5 percent). Those categories representing the lowest proportion of redemptions were sports and wellness (1.5 percent), grocery/pharmacy (1 percent), and travel (0.5 percent).

Beyond that, 87 percent of recipients still prefer physical plastic cards to digital cards or e-codes, the study found. "There is still an incredibly strong demand for people who want to hold their tangible reward and/or don't quite trust digital gift card redemption yet," said Eric Thiegs, president of NGC. "We anticipate the shift of those statistics towards a 50/50 mix in the next 10 years as more Gen Z and Gen Y [Millennials] earn more rewards from their B2B marketplace programs. But currently it's the Gen X and Baby Boomers at the height of their careers or heading into retirement who are earning and redeeming the most loyalty points, and this group will undoubtedly want to see physical gift card redemption as an option in their program."