How Cautionary Spending Is Fueling Gift Card Purchases

Consumers may be spending more cautiously, but they’re not spending less strategically. As inflation, rising debt, and economic uncertainty continue to pressure household budgets, shoppers are becoming intentional about every purchase they make.

To stretch their budgets further, many consumers now map out discounts and sales well in advance of major shopping events and holidays.

This growing focus on value and flexibility is helping fuel interest in prepaid products. Gift cards are no longer reserved for birthdays and holidays; they’re increasingly being used for everything from loyalty rewards and incentives to personal spending and budgeting.

In a recent PaymentsJournal podcast, Sarah Kositzke, Global Insights Director at Blackhawk Network (BHN) and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research discussed BHN’s latest 2026 Global Spring Gifting Research, which uncovered changing consumer behaviors, the role of emerging technologies and platforms, and why gift cards provide retailers with a strategic advantage in any economic environment.

Adapting Gifting Traditions

The financial challenges of recent years have caused staples like groceries to become a budgetary concern for many consumers. Fuel has also become a budget-buster, with prices rising sharply since the beginning of the year.

Even gifting is becoming more intentional, as consumers apply the same value-driven mindset they use in everyday purchasing decisions.

These factors have shifted consumer behavior. Shoppers are now more deal-motivated and intentional about how they spend each dollar. They are leveraging loyalty and rewards programs, and many have leaned into bargain hunting, often with the help of AI or social media.

“It's important that we understand that consumers are not abandoning gifting traditions; they’re adapting how they want to participate in them,” Kositzke said. “They’ve got all of these various channels in which they can leverage to find those cards. It is this major opportunity for brands to think about, ‘How do we offer more flexibility? How are we thinking about the value that we're driving and the convenience, especially as we think about the economic times we're in?’”

In difficult financial times, gift cards are frequently viewed as a port in a storm because they offer budget certainty for buyers and spending flexibility for recipients.

These benefits have made prepaid products particularly popular among younger generations. According to BHN, 72% of Gen Z and millennial consumers purchased gift cards instead of physical gifts this past year, compared to 38% of their older counterparts.

Many younger consumers, often working with smaller discretionary budgets, look for gifts that maximize value, are useful to recipients, and help reduce waste. Gift cards meet that need while also offering convenience for buyers, who can often earn loyalty points or rewards through retailer promotions.

“We saw growth in projected gift card spend as well as purchasing,” Kositzke said. “About 77% of respondents told us, ‘We're going to purchase a card this upcoming year to give to somebody else,’ and self-use showcased almost a double-digit growth. They're starting to recognize that budget value just even for themselves, and younger consumers are especially likely to use gift cards for both gifting and themselves. It's creating that incremental revenue opportunity for brands.”

AI, Loyalty, and Smarter Spending

Another trend driven by younger consumers is the use of AI as a shopping assistant, with many using the technology to compare prices and scour product reviews.

“Consumers are building what we call this value optimization toolkit, where it combines AI searches, loyalty rewards, deal discovery, flexible payment, and all the things that help us act smarter across that purchase journey,” Kositzke said. “I think of it as the place to find all that stored value or the change that you have in your couch cushion. AI is definitel