The global COVID-19 pandemic has been a turning point, a mark of reference for the rise and fall of all our transactions. The gift card industry was not immune to its effects and, against some odds, it has seen and continues to see gradual growth and more changes to come.
Gift cards have been on the scene for some time now. They appeared in the early 1990s and started gaining popularity. Today we can see it’s a payment method that has been adopted by many businesses, especially by major retailers but not limited to them.
Its core and basic benefits still prevail today. On the consumer side, it’s a way to simplify choosing the right gift for those hard-to-shop-for people that’s almost completely hassle-free and allows the receiver a chance to choose what they want. On the business side, although the focus and preference were, and still are, to sell the actual product or service, it was also an innovative way to attract new customers and boost sales during seasonal lulls. An additional benefit of gift cards is that 37% of users tend to spend more than the card value.
Since its earliest uses, we can see a more straightforward win-win situation. This does not mean there weren’t any downsides. These are mainly linked to security reasons and physical limitations. However, time and technological advancements have allowed improvements regarding the security measures that protect the consumer while also refining the type of gift cards available (some are rechargeable, expiration dates have been extended, and further discounts can be included).
Today, we are living in a digitally integrated world. The constant growth in technology giving rise to digital goods and services got an extra push thanks to the temporary impediment of being able to physically go to stores during the crisis. This brought rapid growth in eCommerce and is creating the need for more digital payment methods along with gifting options.
Gift cards are now a $160 billion-plus industry and are projected to continue growing. Consumers are not just limited to personal buyers. Corporations have also adopted these cards as incentives and gifts for employees. There’s evidence that shows how gift card services have progressed but there’s still a ways to go to satisfy the ever-evolving market and tech-savvy users.
So in this expanding industry, it’s interesting to see that about half of these cards actually go unused. This happens due to a range of reasons; some being not needing to purchase anything from a given store at that moment and getting forgotten for example. A way to reduce this large amount of funds going unclaimed is by connecting those who have gift cards with those who want them.