Among shoppers who set a holiday budget, 93% plan to buy gift cards. Among those who don’t, it’s 78%. That gap says a lot about how people are handling gift-giving this year, according to a new survey of 2,307 U.S. holiday shoppers from Blackhawk Network (BHN), a global branded payments provider.
Think of a holiday budget like a grocery list. Gift cards are the pre-measured ingredient: you know exactly what goes in, and nobody ends up with a surprise on the receipt.
What the numbers show
Overall, 82% of surveyed shoppers are setting a holiday budget. They plan to spend an average of $721 on gifts, down 3% from last year. The squeeze is tighter for households earning under $40,000, where planned gift spending is down 13%.
Those households also lean harder on gift cards. Cards make up 36% of their planned gift spending, compared with 29% for households earning $80,000 or more.
“With everyday costs putting pressure on holiday budgets, shoppers are being more deliberate about how they spend,” said Brett Narlinger, BHN’s chief revenue officer. He said shoppers are putting loyalty points, promotions and other value they’ve already earned toward holiday purchases. Gift cards fit because the giver sets the amount and the recipient picks what to do with it.
Younger shoppers are especially into the idea. In several gift categories, they’re two to three times as likely as older shoppers to pick a gift card over a physical present, and rising prices are the reason they give.
Why cards, and which ones
Ease of sending is the top reason people buy gift cards this season. Letting recipients choose their own gift comes second.
Money worries are shaping the choices, too. Grocery and food prices are the biggest economic concern, named by 58% of respondents. Open-loop cards, like Visa and Mastercard gift cards, are the favorite when budgets are tight. They’re preferred by 74% of younger shoppers and 61% of older ones. Other wanted categories:
- Grocery stores: 42%
- Mass merchants: 33%
- Gas and EV charging: 24%
- Subscription services, such as streaming and music: 17% of younger shoppers
Spending power comes from more places than a bank account
Shoppers are pulling value from all over the year. Half plan to redeem most or all of their loyalty points for holiday shopping. Many of those points become gift cards: 61% of younger shoppers and 55% of older ones use points that way. Of those shoppers, 70% plan to give the cards away rather than keep them.
Sales and promotions are also among the biggest triggers for holiday purchases. For retailers and brands, that means a shopper’s real budget includes loyalty value, gift cards and deals, not just cash on hand. The easier those are to find and use, the further a shopper’s money goes.
AI is edging toward the checkout
The survey also hints at where decisions are being made. Forty percent of respondents would click a promotional link if AI recommended a gift card promotion. One in five would buy without doing any more research. For some people, AI is moving past product discovery and closer to the actual sale.
Shoppers mostly want AI to help with value. Finding the best prices is the top planned use, followed by hunting for deals and narrowing gift options before they ever visit a retailer’s site.
“AI is shaping what consumers see and consider before they ever reach a retailer’s website,” said Talbott Roche, BHN’s CEO and president. She added that accurate product information, clear value and a simple path to purchase will matter even more as AI becomes part of the shopper journey.
What to do with all this
If you’re shopping, set your number first, then check what loyalty points you could convert into gift cards before spending cash. If you’re a retailer, make sure your gift card offers have clear pricing, plain-language promotions and a short route to checkout, because an AI assistant may be reading your page before a human does.