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    This individual Report Retail Gift Card Trends in the United States: 2016 in Review is available for purchase. This Report is available to members of Mercator Advisory Group’s Merchant Services Advisory Service. Please be advised that this Report is normally part of a research and advisory service that provides ongoing support throughout the year. As such, this Report 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).

    While the Report represents significant analyst time invested, there is no means of our ascertaining if it will fully meet your specific intended purposes. Typically, these Reports form the basis for future discussions with our clients where we are able to fine-tune additional information that we have gathered in the construction of the series of Reports (or locate new information rapidly due to our exclusive focus on gathering information in the payments industry) for specific member needs.

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Retail Gift Card Trends in the United States: 2016 in Review

Closed-loop gift card loads grew in 2016 as shoppers returned to cards.

Mercator Advisory Group finds that U.S. retail gift card loads grew 6% in 2016.

Mercator Advisory Group’s new research report, Retail Gift Card Trends in the United States: 2016 in Review, documents the dollars loaded in 2016 onto closed-loop prepaid cards or prepaid account access devices issued by retailers. Gift card load growth returned in 2016 as consumers bought more cards, and retailers began to use more of them for incenting consumer behavior.

While no single factor accounts for the renewed growth of the gift card market, Mercator Advisory Group believes that e-commerce has likely played a role. Prepaid cards offer a source of good funds that can be sold and redeemed in every channel. They also offer a way to connect immediate value with customers and prospects through loyalty and incentives programs. These factors likely influenced gift card trends positively.

Except for load estimates, all the charts and tables in this report represent the average reported percentage of total loads, whether the cards were issued for direct-from-consumer loads or as incentives or other business-to-business purposes. The report covers information on form factors, average card loads, and reloads. Distribution information has been excluded from the report and will be explored in future research.

“Closed-loop gift cards continue to be popular for retailers and their customers,” said Ben Jackson, the Director of Mercator Advisory Group’s Prepaid Advisory Service and author of the report. “The closed-loop gift card market has opportunities to continue to grow as retailers learn new ways to make use of their branded currencies in omnichannel commerce.”

This report contains 17 pages and 10 exhibits.  

Highlights of the report include:

  • The closed-loop, In-Store gift card segment returned to growth 2016 after seeing a decline in 2015.

  • There was a slight decline in the Employee and Partner Incentives segment, reflecting a decrease in spending in certain programs.

  • Loads in the Consumer Incentives segment climbed in 2015 as the emphasis seemed to shift in the incentives market. 

  • Gift card trends are influenced by larger trends, and a growth in e-commerce may be helping to fuel the growth of gift card loads as shoppers look to gift cards as branded currency for shopping online.

  • Reported virtual card load volumes seemed to moderate in 2016, but mobile card loads grew.

  • Reloads as a percentage of total volume have become a significant part of the market.