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    This individual Note 2016 Closed-Loop Gift Card Holiday Forecast: Ready for Santais available for purchase. This Note is available to members of Mercator Advisory Group’s Prepaid Advisory Service. Please be advised that this Note is normally part of a research and advisory service that provides ongoing support throughout the year. As such, this Note contains significant depth of content that is selected for its strategic importance to our members. (For a description of these services, see our Advisory Services section).

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2016 Closed-Loop Gift Card Holiday Forecast: Ready for Santa

Gift cards are competitive with discounts as a promotional strategy

New research from Mercator Advisory Group forecasts growth for gift card loads in the 2016 holiday season.

Retailers are recognizing that gift cards are a promotion that can bring shoppers in twice — first to buy a card or an item that earns them a card, and second to redeem the cards they received. Merchants are using gift cards to promote specific items, increased ticket sizes, and even to even the sale of other gift cards. Some have gotten creative and even tied their gift cards to charities to promote the sale.

Using information gathered as part of Mercator Advisory Group’s annual closed-loop prepaid cards benchmark survey, Mercator has created a forecast of the dollar amount that will be loaded onto gift cards that are sold in stores in the United States during the 2016 holiday shopping season. This forecast focuses solely on closed-loop cards sold by issuers in the United States to customers for use in their own stores.

"Closed-loop issuers have the opportunity to drive growth in their card programs and their sales in the new year, if they view gift cards strategically," Ben Jackson, Director of Mercator Advisory Group's Prepaid Advisory Service, and author of the report, comments.