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 definitely going to be leveraged, probably even embedded in there somehow to combine all of these things together.”

As AI plays a greater role in curating products and services, standing out in AI-generated recommendations has become a critical component of merchants’ brand strategies. Down the line, building loyalty will also become more important—and more challenging.

This is an area where gift cards excel. BHN found that roughly 92% of survey respondents participate in loyalty programs, with gift cards remaining one of the most popular redemption options. This self-use of prepaid products can create strong customer relationships, often opening the door to additional engagement and growth.

“That’s another way to optimize your program, to think about how do I get gift cards delivered to somebody who is self-use, but how do I get them to feel like that giftable moment to give to somebody else?” Kositzke said. “This just means your brand needs to think about traditional search, but also what’s beyond traditional search with some of those other e-commerce optimization tools that you might need to leverage.”

Standing out on social media is equally as important as creating AI-friendly branding. Consumers want gift cards to be delivered through the same channels they use to communicate with friends and family, including TikTok and Instagram.

While email is still the primary delivery method for gift cards, younger generations have shown strong interest in social media and text-based delivery options. For these consumers, the experience extends beyond receiving a gift card—it also includes how they discover and purchase it.

“We saw more interest in terms of purchasing on social channels and especially through social streaming events,” Kositzke said. “Think of any of those events where you’re captivated in terms of, ‘Oh my gosh, I wish I could have this,’ but maybe you’re not ready for that full breadth of product line that is being offered in that moment.”

“But a gift card helps to say, ‘I know that I’ll purchase this, but maybe I have this gift card and I have to add some additional funds later,’” she said. “There’s definitely strong interest in getting gift cards during those events. In fact, we saw about 50% of respondents already purchasing gift cards through social streaming events and almost 7 in 10 want to in the future.”

Despite the growing emphasis on AI, social media, and digital gift cards, there remains a strong contingent of customers who expect retailers to offer physical gift cards. In fact, roughly half of respondents in BHN’s research said they would prefer a physical gift card over a digital alternative.

Ultimately, the most effective strategy is an omnichannel approach centered on flexibility. Even when consumers purchase gift cards in-store or online, they expect to use them seamlessly across channels.

“That’s something that’s critical, it’s the digitization of cards and how you manage and handle both a digital card and a physical card in the digital atmosphere,” Hirschfield said. “Digital and physical are not opposing forces, they are complementary forces and there is a merging of them at a certain point into the digital realm that is important.”

Engagement, Retention, and Incremental Revenue

The capabilities of technologies like digital wallets and AI are creating new use cases for gift cards and fueling additional demand. Merchants have responded by developing loyalty programs designed to capitalize on growing self-use trends.

“It all capitalizes on the behavioral returns,” Hirschfield said. “We consistently see redeemers come to the store more. They spend more than the value of the card. They buy more expensive items. When you focus on that behavior, the cycle keeps moving in positive ways. That redeemer who has a positive experience will buy more cards for themselves and for others. It’s a self-fulfilling prophecy.”

This cycle continues to expand through the growth of digital messaging channels and social media platforms. For younger consumers in particular, these platforms have become central hubs where they discover, engage with, and purchase the products they want.

“You want consumers to be met where they are shopping,” Kositzke said. “You’ve got to still be in store, but you can’t forget that digital is online and growing, and in these loyalty ecosystems as well as through social channels. Then, it’s how to get your brand to be recognized within that AI ecosystem too, because you want AI to come ...

Adapting Gifting Traditions

AI, Loyalty, and Smarter Spending

The Rise of Social Channels

Engagement, Retention, and Incremental Revenue