Stored-value cards are spreading around the world. Gift cards make up the space's largest segment, as they continue to offer a more convenient alternative for gifts and the management of ongoing purchases without being limited to cash.
In fact, Tower Group estimates that around $80 billion was spent on stored-value cards last year in the United States. And another research firm estimates that the average purchaser of gift cards bought nearly five cards in 2006. According to the Mercator Advisory Group, 568 million in-store gift cards were purchased in 2005 at card-issuing merchants, while 56 million additional gift cards (about 10 percent of in-store purchases) were bought over the Internet or "J-Hook" distribution channels.
In this white paper, Better ATM Services identifies an emerging strategy that holds particular promise for the ability of ATMs to dispense gift cards — particularly in-store gift cards — in addition to cash. Having gift-card dispensing at the ATM (in addition to cash) creates an additional income model for the existing (and often underutilized) ATM infrastructures, thereby creating an economically viable distribution solution that is cost effective and simple to implement.
