Fourth quarter holiday sales heavily impact the total annual dollar loads on prepaid gift cards. In 2008, both open loop and closed loop gift cards experienced a decline in holiday sales as consumers, shaken up by a dismal economy, reduced their overall holiday gift spending. Now in the midst of the 2009 holiday shopping season, economic indicators suggest recession weary consumers may be looking to reclaim Christmas and prepaid gift cards, especially open-loop products, appear well positioned to benefit from this shift in attitude.
In this research note, Mercator Advisory Group predicts that dollars load on closed loop (private label) gift cards will increase slightly this holiday season (fourth quarter) by 1.9% over the 2008 holiday shopping season. Meanwhile, dollar loads on open loop (network branded) gift cards may increase by as much as 50% over the same quarter last year.