by Alex Palmer | December 11, 2018
A gift card doesn't just motivate workers and sales-team members to boost their performances - it also incentivizes them to boost their spending, according to new research. A study from financial-services company First Data finds that consumers report overspending the original value of their gift cards by an average of $59. That marks an increase of $21 compared with just last year, and the fifth year in a row that overspending has increased.

The report, titled "2018 Prepaid Consumer Insights Study," draws on responses from more than 2,000 U.S. consumers. The report shows that gift-card purchases in general are on the rise, with consumers buying an average of eight physical gift cards (up from an average of 6.5 last year) and 6.3 digital cards (compared to 6.1 in 2017) per year.

The enduring popularity of physical gift cards stood out in the findings, even among younger shoppers, age 18-23, of whom 47 percent said they prefer such cards over any other traditional gift. But the mobile gift-card sector also shows strength, with more than half (52 percent) of consumers saying they would prefer to have a single app, such as Gyft, that manages all of their gift cards.

"Business owners continue to have a tremendous opportunity to drive sales, build their brand and increase customer loyalty by investing in a robust gift-card program," said Dom Morea, senior vice president and head of gift solutions at First Data, in a statement. "Our study shows that gift cards, or branded currency, are not only a potential growth engine for businesses, but are becoming the preferred gift for both purchasers and receivers alike."

As has been the trend over the last several years, self-purchases are a major source of gift-card spend. This year, 64 percent of consumers bought a gift card for their own personal use, an increase from 58 percent in 2017. People age 24-37 saw the biggest boost in self-purchasing rates, from 56 percent in 2017 to 71 percent in 2018.

Also in the self-purchase category, consumers are embracing the "branded currency" of reloadable gift cards or rewards apps for which the more they spend, the more they earn discounts and rewards. In 2018, 33 percent of consumers reloaded a gift card, with shoppers age 18-23 reloading the most (61 percent).

The full findings of the report are available for download here.