Gift cards gain momentum, TSG and BofA find

Gift cards are the gift that keeps on giving, a new report from The Strawhecker Group and Bank of America revealed. The report details research that shows how gift cards drive new customer acquisition, higher spend and stronger engagement.

"Gift cards are one of the most effective ways for merchants to drive new revenue in 2026," researchers wrote in the report, adding that they can help generate early brand loyalty from first-time customers.

Fifty-five percent of consumers surveyed said a gift card would prompt them to try a new business. This was especially true among millennials (64 percent said they'd try a new business if given a gift card for that business) and Gen Z (61 percent).

Offering gift cards across multiple channels

What's more, most participating consumers spend the full value of gift cards, and many (44 percent of those surveyed) spend more.

"Offering gift card redemption across as many channels as possible increases usage and total spend," TSG reported. For example, nearly half of consumers surveyed would be less likely to use a gift card if they were unable to use it in-store (49 percent), with a mobile app (48 percent) or on a merchant's website (48 percent). Fewer, but still a significant share of respondents (39 percent) would be disinclined to use a gift card if they were unable to load it onto a digital wallet.

While demand for digital gift cards is on the rise, demand for plastic cards remains strong. Thirty-six percent of consumers surveyed made purchases using a physical gift card over the past year; 27 percent used gift cards for both digital and in-store purchases.

Rewarding employees with gift cards

TSG and BofA found that many consumers surveyed (81 percent) wish their employers would reward theme with gift cards to their favorite brands.

But most employers have not received the message. Forty percent of consumers said they have not received gift cards from their employers, according to the TSG-BofA report. This stands in contrast to research released last fall by Blackhawk Network. That research found 81 percent of employers in the study offer gift cards and other prepaid cards as employee rewards, while just 41 percent give cash bonuses.

But Blackhawk's research echoes the TSG-BofA finding that employees like receiving gift cards. Blackhawk's survey revealed that gift cards, at 90 percent, are the top requested reward by employees surveyed compared to 72 percent who said they prefer getting cash bonuses. Why? "Employees enjoy an outside-of-work 'treat,' rather than money, which since it [bonus money] is included on their paycheck, [it] often ends up going to pay for bills or essentials," Blackhawk reported.

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