Gift Cards & Vouchers in the UK Summary 2010
Gift Cards & Vouchers in the UK – Summary 2010
£4.02bn sales in 2010
Since 2003 the UK Gift Card & Voucher Associationhas been collating industry sales data from members. From 2009 this data collection has been managed in partnership with Ernst & Young who provide quarterly reports and analysis.
In 2010 UKGCVA members reported sales of just over £2bn. Each year the association estimates the total market share the current membership represents. In 2010 this was judged to be 50%. Therefore the total estimated value of the UK market in 2010 is £4.02bn.
Business to Business increases market share
Sales of gift cards and gift vouchers to corporations for use as customer incentives, employee rewards and insurance replacement continues to be a significant revenue driver for the industry. Those retailers who work in the B2B sector see strong growth and stability with sales to business customers more evenly distributed through the year, unlike the consumer sector where Q4 is so critical to the overall annual success.
Gift Cards exceed Gift Voucher Sales, with new contender looming
The paper gift voucher was launched more than 70 years ago and until 2002 the paper voucher had reigned supreme. In the USA the lack of engagement of the paper gift certificate with consumers lead to an easy move to plastic gift cards. After two or three years of hard sell the US and one UK based gift card processor convinced a handful of UK high street retailers to launch a gift card. Whilst the argument of plastic over paper rumbled for some five years or so, the majority of retailers have now launched a gift card programme. The rise of gift card has also spurred many others to launch, specifically from the restaurant and leisure sectors. Paper gift vouchers have by no means died and remain particular strong in the business to business sector. However 2009 saw the gift card over take the gift voucher in terms of sales. In 2011 the newcomers ‘e-vouchers and SMS’ are set to make a debut and will be vying for position alongside paper and plastic. What is clear is that certain audiences prefer one medium of delivery and other audiences another. The key to success may lay with distribution as opposed to a preference for paper over plastic over e.
As the graph states gift cards are dominated by closed loop, though many of the incentive agents are seeing the development of restricted and open loop card products.
38% of GB population purchased gift cards in last 12 months
In March 2010 the UKGCVA members commissioned research into consumer attitudes towards purchasing and redeeming gift cards and gift vouchers. The highlights of the research showed that 38% of the UK population had purchased gift cards or vouchers in the preceding 12 months. When asked why more had not been purchased the overwhelming response was ‘I didn’t think about it’. The research showed that gift cards and vouchers are desirable gifts and are not seen as a last minute, ‘don’t know what else to buy so will resort to vouchers’ purchase. Those that buy put thought into which voucher will appeal most to their recipient. In summary the report showed significant opportunities for growth in the market with more effective marketing and communication strategies required to increase the presence of gift cards and vouchers in store and on line.
2011 – January to June Summary
The Ernst & Young sales data for the first half of 2011 brought welcome news the retail sector where month on month sales were flat or down (according to the British Retail Consortium). Gift Voucher and Gift Card sales in the UK were up 15.6% in Q1 and 14.3% in Q2 compared to the same periods in 2010. Growth was driven from both consumers and the corporate sector.
Year-end forecast promising
UKGCVA members are confident of continual growth as we enter the lucrative latter end of the year. The number of gift card programmes is now likely to be over 200 with many new players entering the market. Two or three high street retailers have launched sms and e-vouchers and it is expected that a small number of other retailers will follow before the end of the year. Christmas 2012 is forecast to be a ‘digital’ Christmas.
Distribution remains the key to success with sales from both gift vouchers and gift cards remaining strong; e and sms is bringing new customers with little cannibalisation to the existing voucher and card sales.
Giving vouchers and cards for friends and loved ones to buy exactly what they want is very desirable in tough economic times, the range of gift voucher and card options available means that everything from a small treat to desirable experiences can be purchased with a gift card, gift vouchers, e-voucher or sms gift card.
This summary was updated in September 2011 by Andrew Johnson, Director General of the UKGCVA.
For more details or to purchase the 2010 research please contact the UKGCVA on 0870 241 6445 or
About the UKGCVA
UK Gift Card & Voucher Association was established as a trade body in 1996 to represent the key players in the £4 billion prepaid gifting market including gift cards, vouchers and stored value solutions. It provides an information and reference point for both voucher and gift card suppliers and customers, and is at the forefront of the issues affecting the industry.
Its main objective is to raise the profile and use of vouchers and gift cards within the UK, promoting the industry to consumers, businesses, government and other interested parties.