Consumers Forecasted to Spend $38 Billion on Closed-Loop Gift Cards this Holiday Season

Nov. 17, 2011 - PRLog -- Boston, MA -- Consumers will buy more than 1.2 billion closed-loop, retailer-issued gift cards during the 2011 holiday season. Holiday shoppers will load an estimated $38 billion onto those cards, according to projections by Mercator Advisory Group, the leading payments and banking research and consulting firm.

The Holiday 2011 Closed-Loop Forecast: There's No Gift Like Plastic for the Holidays report combines information from Mercator's annual prepaid benchmark and interviews with major retailers and other industry players to derive his holiday forecast.

"Additional data gathered as part of this year's prepaid benchmark survey and enhanced relationships and increased participation from retailers made this forecast possible," says Ben Jackson, senior analyst of Mercator's Prepaid Advisory Service and author of the report.

Jackson says his forecast represents an increase over 2010 holiday retail gift card sales.

As part of the holiday forecast, Jackson reviews methods for the delivery and acquisition of these products as well as the number of cards to be sold through gift card malls, which are found in retail stores across the country. A projection for the number of virtual retail gift cards is also provided. Acquired over the internet by consumers, virtual gift cards are delivered via e-mail to recipients and are quickly gaining adoption by consumers and retailers.

"While gift cards were once just a plastic replacement for paper gift certificates, new technology has provided a variety of new possibilities for retailers. Each holiday season brings new techniques and features. It will be interesting to see what retailers experiment with," Jackson says.

An example of new gift card strategies being developed by retailers is the increased offering of reloadable gift cards as a way of connecting recipients to loyalty programs and in-store promotions. "These capabilities help change the cards from a mere transactional tool to one that helps to foster loyalty and a long-term relationship with customers," Jackson comments.

The Holiday 2011 Closed-Loop Forecast: There's No Gift Like Plastic for the Holidays, can be obtained at Mercator Advisory Group's news and information portal PaymentsJournal.com.


Follow this link to download the free report (under Mercator Downloads): http://www.paymentsjournal.com/Mercator.aspx


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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. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.