West Lafayette, Ind., An estimated $30 billion will be spent on gift cards this year, a 10% increase from the year before, according to Richard Feinberg, a researcher with Purdue University's Retail Institute.
"We estimate that over 60% of gift givers will be purchasing gift cards this year," Feinberg said. "Each buyer will purchase five cards or more. Other research shows that 50% or more of people who expect gifts would like gift cards."
Gift cards trail only apparel as the most frequently given holiday gift, Feinberg said.
Although some supermarkets, convenience outlets and drug stores sell gift cards for other retailers, Feinberg said most are sold in the stores where they will be used. In addition to drawing customers into stores, gift cards also help to drive additional consumer spending.
"Our research shows that people with gift cards spend an additional 25% over their value," he said.