A Foolish Take: Americans Still Prefer Gift Cards for the Holidays

Leo Sun, The Motley Fool

American shoppers should spend an average of $1,007.24 during the holidays this year, representing 4.1% growth from last year, according to the National Retail Federation and Prosper Insights & Analytics. The study also revealed that gift cards topped consumers' wish lists for the 12th year in a row.

Chart showing gifts consumers would like to receive

Data source: NRF. Chart by author.

The popularity of gift cards is good news for Amazon (NASDAQ: AMZN), Apple, Walmart (NYSE: WMT), Starbucks, and Target (NYSE: TGT). They sold the five most popular gift cards (by quantity) in the U.S., Canada, U.K., and Europe last year, according to NGC.

NGC also noted that big box retailers -- which include Amazon, Walmart, and Target -- led the market last year, accounting for 26.8% of all gift card sales. Open loop (prepaid debit and gift) cards ranked second with a 21.8% share, followed by entertainment cards at 17.4%.

Gift cards remain popular because they let the recipient choose the gift. Digital gift cards are also becoming more popular, but physical cards still accounted for three-quarters of all gift card sales last year, according to NGC.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon and AAPL. The Motley Fool owns shares of and recommends Amazon, AAPL, and SBUX. The Motley Fool has the following options: long January 2020 $150 calls on AAPL and short January 2020 $155 calls on AAPL. The Motley Fool has a disclosure policy.