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First Data releases results of Q2 prepaid card survey

July 17, 2011

First Data Corporation, a provider of electronic commerce and payment processing solutions, has released an overview of its First Data SpendTrend Closed-Loop Prepaid Cards analysis for the second quarter of 2011. The analysis tracks year-over-year same-merchant activations, redemptions and reloads of merchant-branded prepaid cards in the U.S., including spending, gift, incentive and promotional cards.

Economic trends played a significant role in consumer behavior during the second quarter. April saw the overall year-over-year dollar volume growth of gift card activations, redemptions and reload slow after the majority of holiday cards were redeemed during the first quarter. Dollar-volume of activations, redemptions and reloads rebounded during the May and June Mother's Day, Father's Day and graduation gift-giving season.

Average ticket growth in activations and redemptions grew in April, due in part to rising prices. Activation average ticket growth moderated in May and June as consumers responded to continued high unemployment and negative economic news.

In May, casual dining, specialty retailers and QSRs all reported increased dollar volume and transaction growth in activations over the previous month. Casual dining merchants continued the surge in June, driving the increase in overall dollar volume and transaction.

"We continued to see positive dollar volume growth of activations, redemptions and reloads throughout the second quarter, said Silvio Tavares, SVP and division manager of First Data Global Information and Analytics Solutions. "While the economy's effect on consumer spending has impacted gift cards, they remain a popular payment choice among consumers."

Year-Over-Year-Over-Year Gift Card Dollar Volume Growth

Note: All transactions are total year-over-year activity.