News

Prepaid cards see largest increase in activation dollars in 4 months

December 13, 2011

First Data Corporation, a provider of electronic commerce and payment processing, today released its First Data SpendTrend Closed-Loop Prepaid Cards analysis for the month of November. The analysis tracks U.S. same-merchant activations and redemptions of merchant-branded prepaid cards including spending, gift, incentive and promotional cards.

Activation transaction growth led the way in November with year-over-year activation transaction growth at 12.3 percent. Specialty retailers saw activation transaction growth of 19.4 percent growth in November. Casual dining and quick service restaurants also posted double-digit growth increases in November.

Consumers seem poised to increase their gift card utilization this holiday season. Activation dollar volume rebounded in November with an overall growth of 16.7 percent, reversing a three-month slowdown of growth. Many industries posted sequential activation dollar volume growth improvement. Specialty retail posted a healthy increase over last year of 17.9, following a three-month trend of negative growth.

Redemption dollar volume and transaction growth both reached yearly highs in November, a favorable indication for gift card sales this holiday season. Overall redemption dollar volume growth was 24.8 percent in November. This marked the fifth consecutive month that overall redemption dollar volume growth exceeded 20 percent. Overall redemption transaction growth was up 23.5 percent, the largest increase over the past year.

"Indications are pointing to consumers using gift cards more this holiday season and it will be interesting to see if activation dollar volume continues to increase through the year's end," said Silvio Tavares, SVP and division manager of First Data Global Information and Analytics Solutions, which publishes SpendTrend. "The strong growth of redemption dollar volume and transactions signals to us that more consumers are recognizing the value of gift cards in their wallets and remembering to use them at the point of sale."

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