UK and US: The Surge of Self-Use Gift Cards
Consumers show more similarities than differences when using gift cards for self-consumption
by Brenda Brenda Gilpatrick, Your Fantastic Plastic

Unless you are an “insider” at a global processor or distributor, it can be difficult to compare and contrast gift card trends and use cases between countries or continents. Furthermore, gift card programs are at different stages of development across the globe where an apples-to-apples comparison is impractical. But, there’s good news. Research is emerging that allows us to take a look at what is alike or different between how consumers utilize gift cards in the United Kingdom and the United States. And, that’s not all. This article focuses specifically on the “self-use” phenomenon. “Self-use” is defined as a gift card purchase that a person makes to spend on goods or services for self-consumption.

The best way to start is to view a side-by-side comparison of the trends.

First Data Consumer Insights Study and Your Fantastic Plastic Self-Use Survey, 2017

Remarkably, much more is alike than different. Significant percentages of the population in both countries are using gift cards for self-use. Furthermore, getting a discount on the purchase of that self-use gift card is a shared motivational trait between both populations.

The most popular categories of stores where self-use spending is occurring are similar. Furthermore, overspend or lift on that self-use gift card is nearly identical when the exchange rate is applied, and self-use gift cards are driving more loyalty in both places.

There are a few differences. In the UK, convenience and application as a budgeting tool are cited as motivators. There’s no definition of “convenience” in this context, but it could mean gift cards are preferred and easier to manage than other traditional forms of discounting, like coupons.

Americans appreciate self-use gift cards as a reward mechanism, either to obtain spending-based rewards, like at Starbucks, or to trade hotel and credit card loyalty points for gift cards they use themselves. Many also prefer to use a gift card for online purchases versus a credit or debit card.

Both countries report that fashion, supermarkets and entertainment gift cards are 3 of the top four most popular categories for self-use. In the UK, electronics also ranks high and, in the U.S., restaurant gift cards round out of the top 4.

It’s clear that consumers on both sides of the Atlantic appreciate getting a good deal and being able to manage discounted shopping on gift cards. We can also deduce that they are participating in a similar kind of “self-directed loyalty” where a shopper determines where they spend based on the availability and discount rate of a gift card. As the self-use space continues to grow, we can continue to observe the similarities between the countries as well as how this phenomenon catches on globally.

Thanks to Steve Bradbury, a UK-based colleague, for brainstorming on the meaning of “convenience.”

Brenda Gilpatrick is the founder of Your Fantastic Plastic, a U.S.-based gift card, payments and Fintech consultancy.