an INTERACTIVE HISTORY of
GIFT CARDS

In 2012, Americans will spend about $100 billion on gift cards. Twenty years ago, the gift card industry as we know it didn't even exist. Where did this overnight industry come from? Follow the meteoric rise of the gift card market from the early 1990s to the present day from three perspectives: Adoption, Regulation and Crime.

  • Market_icon
  • Adoption_icon
  • Regulation_icon
  • Crime_icon
  • Market

  • Adoption

  • Regulation

  • Crime

Market_chart
33%

Percentage the gift card market has grown per year from 1995-2012

This growth is faster than

~3%
USA GDP Growth
~6%
China GDP Growth
~24%
Apple's Stock Growth

Gift cards are the Number One item on adults' wish lists for the 2012 holidays

57%

of people would like to receive one

2/3

of all consumers have bought a gift card

The Credit Card Act of 2009 forbids gift card expiration within 5 years of purchase / value adding.

Calendar one year Calendar one year Calendar one year Calendar one year Calendar one year
Row of bills Row of bills Partial row of bills

The government has reviewed over 181 bills related to gift cards from 2008-2011 - most were passed.

The value of unredeemed gift cards in 2008 was $96 million.

Stacks of money
2-5%

of the world's GDP laundered, often through gift cards

Employee

Store employees are to blame for

of gift card fraud.

62%
13%

of fraud comprised of stolen or fake gift cards.

THE TIMELINE

  • $500M

  • $1B

  • $12B

  • $25B

  • $50B

  • $83B

  • ~$100B

  • Amex moves early

    American Express introduces gift cheques, their first offering in the gift card space. (1988)

  • Blockbuster & NM follow

    Neiman Marcus and Blockbuster offer the first plastic gift cards, largely to combat counterfeit gift certificates. (1994)

  • More retailers adopt

    Gift cards start gaining popularity with big retailers, including Macy's, the Gap, Bloomingdales, etc. (1998)

  • Open-loop created

    Visa introduces the first open-loop gift card in the form of a credit card. (1999)

  • Records shattered

    Forrester Analysts predict that the gift card market would be as large as $17B in 2004. The actual number was triple the estimate. (1999)

  • Online emerges

    Some of the first online gift card companies crop up during the tech boom, including 800giftcertificate.com (2001)

  • Gift-wrap declines

    "Some in the industry speculate that the rapid growth in sales of gift cards, which require only a envelope as wrapping, have contributed to slowing gift-wrap sales." (2001)

  • Increasing share

    Gift Cards are expected to account for 8-10% of holiday sales, as opposed to the 5% of years past. (2003)

  • Q1 blues over

    Gift cards attributed for increased retailer sales in January and February, become most requested gift on people's holiday wish lists. (2004)

  • Customization

    Customization begins: Sam's club offers environmentally friendly gift cards; Starbucks allows people to design and customize gift cards online. (2006)

  • Tricks & Gimmicks

    Target introduces a tiny digital camera that works as a gift card; Best Buy releases a gift card that can be plugged into an MP3 player and works as a speaker. (2008)

  • Innovation

    GiftRocket and other startups form to create online equivalents of gift cards. (2010)

  • The Wild West

    Gift cards remain unregulated early on before their mass adoption. (1990s)

  • States begin regulating

    Regulators in California begin to crack down on excessive fees for store credit cards. More than 24 cases against Home Depot, Sharper Image, and others. (2002)

  • Home Depot Shakedown

    Home Depot, in a settlement with the New York Attorney General, agrees to stop treating gift cards like cash if they are lost or stolen, now replacing lost or stolen cards with proof of purchase. (2002)

  • Simon Sued (pt 1)

    The Visa-issued Simon Gift Card begins to receive compliance inquiries for hidden fees by the state of Connecticut. (2003)

  • National Legislation Begins

    The “Fair Gift Card Act” introduced, which would improve disclosure practices for hidden fees on gift cards. (2004)

  • Simon Sued (pt 2)

    The Visa-issued Simon Gift Card gets sued for gross violations of all three rules in Massachusett’s gift card statute. (2005)

  • Play Fair, K-Mart

    K-Mart and the Darden Group (Olive Garden) settle a suit with the FTC for deceptive practices related to gift card fees. (2007)

  • CARD Act passes

    US Congress passes landmark gift card legislation, entitled the CARD act, prohibiting closed-loop cards from expiring in under 5 years. (2009)

  • Money laundering

    Gift card related crime begins to bloom, with people increasingly financing gift cards with stolen credit cards in order to quickly extract their value. (2000)

  • Traffic

    Fraudsters and drug traffickers begin using stolen credit cards to buy gift cards to get cash back or to later buy merchandise to sell. (2002)

  • Scammers

    A 19-year-old Home Depot employee is arrested for counterfeiting $5000 of the store's gift cards. (2005)

  • Gift Cards & Medellin?

    A federal report suggests that drug lords and financiers of terrorism are increasingly using gift cards to launder money. (2006)

  • Drug Busts

    The DEA cites instances of criminals coming to drug buys loaded with hundreds of thousands of dollars in gift cards. (2007)

  • A Safer Alternative

    Marketplaces like eBay become rife with gift card crime, and secondary markets crop up to facilitate secure gift card exchange. (2008)

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GIFTROCKET: A MODERN GIFT CARD

GiftRockets are online money gifts, with suggestions of where to spend them. That way, the recipient has ultimate flexibility in how they'd want to use them.

Thoughtful money gifts were the predecessors of the present day gift card. We're bringing them back.

Send a GiftRocket

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