Graduates will soon be flush with gift cards and cash, according to an annual survey on graduation gift spending from the National Retail Federation (NRF) and Prosper Insights & Analytics. However, overall spending will fall to $5.2 billion from a record $5.6 billion last year and $5.4 billion in 2016. The average gift-giver will spend $102.51, down slightly from 2017's $104.92.

"One growing trend we have noticed year over year is the fact that peers continue to give gifts to each other," Prosper Insights Executive Vice President of Strategy Phil Rist said in a press release. "Most prefer to give cash, along with the quintessential graduation gift card, to celebrate the new grad."

Graduates throw their hats in the air.

Cash remains the most-popular graduation gift. Image source: Getty Images.

What are graduates getting?

It's no surprise that cash remains the most popular gift, with 55% of the 7,681 respondents surveyed giving it "to help students with the costly transition from high school to college or college to the 'real world,'" according to the press release. The second most purchased item was greeting cards at 43%, though those are largely bought as vessels to carry the cash, followed by gift cards (32%).

Clearly people see the value in giving graduates money or the purchasing power of gift cards, as those two choices greatly outpace everything else on the list. Still, 14% of gift givers will give apparel, and 10% plan to purchase electronics as their gift to the graduate.

"Graduation is a huge milestone for students and parents alike, and retailers are ready to help make it even more memorable," NRF CEO Matthew Shay said in the press release. "Cash might be the most popular item, but an assortment of graduation gifts from greeting cards and gift cards to clothing and electronics will tempt shoppers."

Be practical

Graduation generally marks a transition for the graduate. It may mean moving away from home for college, starting a job, or moving out altogether after finishing school. Because of that, think about what gift you can give that will most help the graduate in his or her new life.

Cash might seem like the best bet, but a gift card to someplace practical might be a better choice. Think about the person receiving the gift. Will he or she spend cash wisely? In some cases, buying the person something needed for the next step of his or her journey might be the best possible option.