Shoppers turn to BNPL and gift cards

Illustration of wallet with money banknotes coins and bank card in wallet with arrows up showing income growth on yellow background. Photo: Monstera Production/Pexels

Holiday shoppers are considering buy now, pay later (BNPL) and gift cards as they manage budgets this season, according to the 2026 Consumer Holiday Spending Study by the Electronic Transactions Association and TSG. The survey of 1,099 U.S. consumers shows mixed adoption of BNPL, with 47% saying they won’t use it at all this year.

Only 20% plan to increase BNPL use, while 25% will use it about as much as last year. The remaining 9% intend to use it less. Affordability is a key concern, with 64% of shoppers worried about costs, a 17% increase from 2025, and 57% focused on budget management, also up by 17%.

Middle-income shoppers lead BNPL adoption, with 10% using it frequently, compared to 9% of high-income and 8% of low-income consumers. Only half of low-income users who try BNPL continue using it regularly. Kelly Prange, TSG’s senior research analyst, notes that low-income consumers may face less favorable repayment terms, impacting their ability to adhere to them or use BNPL in the future.

BNPL’s appeal lies in its flexibility for unexpected purchases. Prange explains that consumers often use it for large or unplanned expenses, making planned usage difficult to measure as need drives adoption.

Gift cards remain popular, with 71% planning to buy them. Store-specific cards lead at 52%, followed by restaurant (39%), general-purpose (35%), digital (21%), and gaming/entertainment (20%) options. 8% will purchase cards for themselves.

Branded gift cards are favored for three reasons: perceived thoughtfulness, promotions, and lower fees. Prange highlights that closed-loop cards suggest the buyer knows the recipient’s preferences, while ease of purchase also contributes to their popularity.