Economic trends played a significant role in consumer behavior during the second quarter, according to First Data Corp.’s SpendTrend Closed-Loop Prepaid Cards analyses.

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. Closed-loop cards generally can only be used at the issuing merchant or affiliates.

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 and specialty retailers 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, senior vice-president 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

 

		April 2011		May 2011		June 2011
Activations		+4.1%		+8.4%		+13.7%
Redemptions		+6.4%		+14.5%		+15.0%
Reloads		+20.0%		+27.8%		27.5%

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


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