Retailers have an opportunity to cash in

For the upcoming holiday season, consumers will be looking to spend smarter in the face of economic pressure. In an unpredictable economy, marked by tariff concerns, supply chain disruptions, cybersecurity threats and shifting consumer behaviors, gift cards are a powerful and versatile tool that consumers can leverage when shopping for presents and for themselves.

That’s the finding of the Q3 2025 Gift Card Gauge from Fiserv, which examines how economic unpredictability is prompting consumers to shift their holiday shopping behavior, how consumers use gift cards, and what trends merchants can leverage to increase positive customer experiences and boost sales.

In May 2025, Fiserv surveyed more than 1,000 U.S. consumers aged 18 and older to compile research for Q3 2025 Gift Card Gauge. The margin of error for the results is +/- 3%.

The survey found that 69% of consumers reported their shopping habits have been directly influenced by economic conditions, while 80% expressed concerns about the financial implications of tariffs. These pressures are encouraging a broader shift toward more intentional, value-conscious spending.

Gift cards have become a strategic financial resource that enable consumers to maximize holiday budgets, plan expenditures and maintain flexibility without sacrificing value during this busy retail season.

Gift cards provide a tool to navigate rising prices and limited inventories. In an economy that demands agility, the cards represent a practical solution that stretches pocketbooks and supports smarter financial planning ahead of the holidays.

Merchants must adapt to shifting behaviors, knowing that shoppers are increasingly seeking deals outside of conventional holiday shopping windows and gravitating toward brands that offer financial flexibility for their seasonal spending. These changes are reflected in consumers’ plans to spend less on gifts in 2025; with 56% cutting back or saving money overall; 53% taking advantage of off-season sales to purchase gifts; 41% reporting that reduced incomes are impacting their holiday spending; and 38% spreading their spending across the year, rather than concentrating purchases in a single season.

Consumers choose practicality over premium gift card preferences

The flexibility and spending power of gift cards continue to make them a preferred gift among consumers. The appeal is clear: only 16% of consumers disagree that gift cards hold more value in today’s economy. As financial priorities shift, shoppers are looking for ways to give gifts while ensuring their money is well spent. Gift cards provide balance between thoughtfulness and practicality, offering both convenience and purchasing power.

Consumer preferences further reinforce the importance of brand familiarity when it comes to gift card selection. In fact, 62% of consumers would rather receive a $25 gift card for a store they frequently visit than a $50 gift card for a store they rarely shop at. Shoppers are also twice as likely to prefer gift cards for essential, everyday brands over nonessential or luxury retailers. This highlights a growing trend in which consumers prioritize usefulness over extravagance, making gift cards a go-to option for thoughtful, financially savvy gift giving.

 

Exclusive perks drive repeat business

Loyalty programs have become a tool for merchants looking to gain a competitive edge this holiday season. With economic pressures influencing their spending, shoppers are increasingly turning to brands that offer tangible rewards, sales and exclusive perks. 

More than three-quarters (78%) of consumers say they are more likely to shop at retailers where they hold loyalty memberships, demonstrating how these programs encourage repeat business and long-term customer relationships. Additionally, the same percentage of shoppers are willing to sign up for loyalty programs with new retailers if the program gives them access to special offers. This underscores the importance of incentives in attracting new customers, especially during the holiday season when consumers shop for gifts outside of their typical retailers’ industries.

The opportunity for merchants lies in integrating loyalty rewards with gift card promotions to enhance shopper engagement. By offering additional points or exclusive discounts alongside gift card purchases, retailers can provide consumers with more bang for their holiday budget while reinforcing brand loyalty. Such incentives not only encourage shoppers to return but also position brands as trusted partners in helping consumers navigate holiday spending.

Fraud prevention remains crucial as gift card popularity grows

Fraud is a significant concern for 84% of gift card shoppers this holiday season. Nearly half (47%) identify card draining – in which scammers take gift cards off shelves, steal the cards’ information, and drain the funds as soon as the balance is available – as their primary fear. This issue is particularly pressing, given that 55% of shoppers prefer purchasing gift cards in-store, a practice that may increase their exposure to these risks. Merchants must proactively protect customers to reinforce trust in gift card transactions as fraudsters continue to evolve their tactics, especially during the high shopping volume of the holidays.

Retailers can safeguard consumers by implementing key fraud-prevention measures. Educating shoppers about common scams and warning signs is important for consumer awareness. Additionally, promoting the security measures put in place for both in-store and online gift card options helps reassure customers about safe purchasing methods. 

Enhancing security measures like secure activation, fraud watch and multi-factor authentication significantly reduces the risk of fraud. By prioritizing gift card and consumer safety, merchants safeguard their customers and boost brand credibility, ensuring gift card transactions remain secure throughout the holiday season and beyond.