U.S. shoppers are turning to gift cards to keep holiday gifting within budget, while using loyalty points and promotions to make their available spending power go further. At the same time, AI is beginning to influence where that spending goes, according to new research from Blackhawk Network (BHN), a global branded payments provider.

The annual study* of 2,307 U.S. holiday shoppers found that 82% of those surveyed are setting a holiday budget, and gift cards are playing a significant role in those plans. Among shoppers setting a budget, 93% plan to buy gift cards, compared with 78% of shoppers without a budget.

Surveyed shoppers plan to spend an average of $721 on holiday gifts, down 3% from last year. The pressure is greater among households earning less than $40,000, where planned gift spending is down 13%.

“With everyday costs putting pressure on holiday budgets, shoppers are being more deliberate about how they spend,” said Brett Narlinger, chief revenue officer at BHN. “They’re putting loyalty points, promotions and other value they’ve already earned toward holiday purchases, while also thinking more carefully about how much they spend on each gift. Gift cards help with this by letting shoppers set a clear amount while giving the recipient flexibility over how to use it.”

Gift cards are playing a larger role in tighter holiday budgets

Lower-income shoppers surveyed are also allocating a larger share of their holiday gift budgets to gift cards. Gift cards account for 36% of planned gift spending among shoppers earning less than $40,000, compared with 29% among those earning $80,000 or more.

Across several gift categories, younger shoppers are two to three times as likely as older shoppers to choose gift cards instead of physical gifts, citing concerns about rising prices.

The findings point to how gift cards can make holiday gifting easier for both shoppers and recipients. Shoppers can set a defined amount they are comfortable spending, while recipients have flexibility over how and when to use that value.

Convenience is another reason shoppers are choosing gift cards. Ease of sending is the leading reason shoppers cite for buying gift cards this holiday season, followed by giving recipients the freedom to choose their own gift.

That flexibility can be especially relevant when everyday expenses are competing with holiday spending. Grocery and food prices are the leading economic concern, cited by 58% of shoppers surveyed. When budgets are tight, open-loop gift cards like Visa and Mastercard gift cards are the top choice, preferred by 74% of younger shoppers and 61% of older shoppers. Other desired categories include grocery stores (42%), mass merchants (33%) and gas and EV charging (24%). Among younger shoppers, 17% also want subscription-service gift cards, including streaming and music.

Shoppers are assembling holiday spending power from multiple sources

Shoppers’ holiday budgets include value that they have accumulated throughout the year. Half of shoppers surveyed plan to redeem most or all of their loyalty points for holiday shopping. Gift cards are one way they are putting that value to work, with 61% of younger shoppers and 55% of older shoppers surveyed using loyalty points for gift cards. Among those shoppers, 70% plan to give the gift cards they purchase with redeemed points to someone else.

Promotions are another way shoppers are stretching their spending power. Sales and promotions are among the leading triggers for holiday shopping.

For retailers and brands, this means the money available for holiday shopping can extend beyond what consumers have in their bank accounts. Loyalty value, gift cards and promotions can all factor into what shoppers can spend and where they choose to spend it. Making those sources of value easy to find and use can help shoppers make their holiday budgets go further.

AI is moving closer to the holiday purchase decision

AI is also beginning to influence how shoppers decide where to spend. Forty percent of those surveyed say they would click a promotional link if AI recommended a gift card promotion, and one in five would buy without doing additional research. The findings suggest that for some consumers, AI is moving beyond product discovery and closer to the transaction.

Value is central to how shoppers plan to use AI tools. Finding the best prices is the most common planned use of AI for holiday shopping, with shoppers also turning to AI to find deals and narrow their gift options before reaching a retailer’s website.

For retailers, that places greater importance on the information shoppers and AI tools can find and use to evaluate an offer. Clear product information, pricing and promotions, paired with a straightforward path to purchase, can help shoppers evaluate and act on gift card offers during an AI-assisted shopping journey.

“AI is shaping what consumers see and consider before they ever reach a retailer’s website,” said Talbott Roche, CEO and president of BHN. “That puts more importance on making offers easy to find, understand and act on. As AI becomes embedded in the shopper journey, accurate product information, clear value and a simple path to purchase will matter even more.”

Download BHN’s 2026 U.S. holiday research report here for additional findings and recommendations for holiday gift card programs.

*Research methodology

The BHN 2026 Holiday Branded Pay Study was conducted online July 23–28, 2026. The sample included 2,307 U.S. adults 18 and older who had purchased gifts in the past 12 months and planned to shop during the 2026 holiday season. The U.S. survey was part of global research involving more than 20,000 consumers across 20 countries.

About Blackhawk Network (BHN)

Today, through BHN’s single global platform, businesses of all kinds can tap into the world’s largest network of branded payment solutions. BHN helps businesses grow revenue, increase loyalty, motivate and reward their teams, disburse funds and engage consumers. Branded payment solutions include the issuance and distribution of gift cards, eGifts, corporate payouts and rewards, along with the technology to deliver these products in seamless, integrated ways. BHN’s network spans the globe with more than 400,000 consumer touchpoints.

BHN’s direct-to-consumer gift card marketplace, Giftcards.com, is America’s highest-rated online gift card destination, with more than 45,000 verified reviews and more than $2 billion in gift card sales.

Learn more at BHN.com.

Media gallery

About The Author
Business Wire