U.S. virtual gift card sales expected to grow to US$8B in 2013, US$11B in 2014; 61% of U.S. consumers chose virtual gift card over physical one when given a choice, finds ALG

Cindy Allen

RICHMOND, Virginia , March 8, 2012 (press release) – Gift cards have become ubiquitous, available for sale at a seemingly endless array of locations. According to the National Retail Federation, gift cards were the most requested holiday gift for 2011, the fifth year in a row that they've topped consumers' wish lists. Not surprising then, that TowerGroup, a Corporate Executive Board Company and leading financial services research and advisory firm, estimated that total spending on gift cards in the U.S. would hit a high of $100 billion at the end of 2011.

With the growth of mobile technology, consumers' preferences are evolving related to how and when they use gift cards. As such, people are embracing virtual gift cards delivered to their email inbox or mobile phone via text message. In fact, leading loyalty provider, Affinion Loyalty Group (ALG), found when given a choice between a physical gift card and a virtual one for a particular brand, nearly 61 percent of consumers chose the virtual option.

In another survey of loyalty program participants, ALG found that more than 76 percent of respondents would choose delivery of the virtual gift card as an email. Only a small fraction of the population would opt for delivery of the card as a text message to their mobile phone. More than 66 percent of respondents ranked virtual gift cards as easy to use when redeeming them at their selected merchants.

According to Mike McDonnell, Vice President of Product Management and Client Solutions at ALG, "Virtual gift cards is a burgeoning market within loyalty programs and beyond. And, the virtual boom is predicted to continue. Virtual gift cards are forecasted to reach $8 billion in 2013 and $11 billion in 2014, according to TowerGroup. ALG has an industry leading infrastructure for both plastic and virtual gift cards; many of the largest financial institutions rely on us to fulfill gift cards for their loyalty program customers. Our virtual gift card delivery platform is a seamless extension of our time-tested plastic fulfillment infrastructure and demonstrates how ALG is progressing our product roadmap into the digital space. Companies can rely on ALG to deliver virtual gift cards accurately, securely and in a timely manner to their customers."

ALG's Group Vice President of Sales and Strategy, Charles Christianson, will participate in a panel discussion about the acceptance of digital gift cards at Prepaid Expo on March 19 at Mandalay Bay in Las Vegas. To learn more, visit www.PrepaidExpoUSA.com.

About Affinion Loyalty Group:
Affinion Loyalty Group (ALG) is a leading loyalty provider whose products and services touch more than 125 million consumers. With 30 years of experience, the company drives incremental revenue by increasing customer loyalty for its clients who include top financial institutions, hotel and airline companies, and automotive manufacturers. Headquartered in Richmond, Va., ALG is the loyalty division of Affinion Group, the global leader in customer engagement. For more information, visit www.affinionloyalty.com.

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