When choosing a gift for someone, there is a lot of pressure to get the right gift. It can be an overwhelming position to be in. Imagine this scenario, the customer must be aware of the likes and dislikes of the recipient and choose accordingly. For someone who is exhausted with a lot of things on his/her plate, which is the case with most of us today, gift cards are a boon. They take decision fatigue out of the equation. You don’t have to worry whether the gift you chose is right or not, because the onus of choosing is on the recipient. In this article, we discuss the types of gift cards available, and why digital gift cards have a huge advantage.

How Do Gift Cards Work?

A gift card is preloaded with a certain amount of money. The customer usually buys it for someone else, but they do buy it for personal use as well. Gift cards can be open-loop and closed-loop.

An open-loop gift card is one that can be used anywhere where a particular brand of card is acceptable. For example, Visa, MasterCard, American Express, or Discover.

A closed-loop gift card can only be used with certain brands. If you purchase a gift card that belongs to Walmart or Starbucks, it can only be used there.

There are two types of gift cards- physical and digital gift cards. Physical gift cards can be used online or at the store while digital gift cards can be used using your smartphone or online. They come with their own set of benefits and features.

Trends in Online Gift Card Preferences:

• Online returns that cost retailers anywhere from $10 to $20 per item can stop being a problem with the help of gift cards
• Consumers spend $59 more than the value present on the gift card
• The balance of unredeemed gift cards between 2005 and 2015 was estimated to be $45.7 billion
• Gifts.com says that 35% of the average shopper’s holiday budget is spent on gift cards
• The gift card market is expected to reach $510 billion by 2025
• 65% of customers are likely to visit a business that offers gift cards
• According to InComm, millennials make up 37% of gift card buyers
• 33% of people spend more on gift cards than any other gifts
• 81% of customers are interested in receiving store credits in the form of gift cards
• A Blackhawk Network and Market Research report says that 69% of employees prefer getting gift cards from their employees as a reward for their work
• The Adobe Personalization Survey says that 89% of marketers see a positive ROI when they incorporate personalization into their campaigns
• 17% of consumers buy 7 or more gift cards a year for personal use
• 53% of consumers have purchased gift cards because of cashback rewards or BOGO offers

The above statistics tell you the importance of gift cards, both physical and digital. They have created such a change in shopping behavior among customers that businesses have made gift cards a major part of their sales channel.

Digital Vs. Physical Gift Cards: Why is the Former Better

Gift cards can either be physical or take a virtual form. Digital cards have a gift card number associated with them and can be redeemed accordingly. Even major brands offer both physical and digital gift cards.

A digital gift card is a virtual gift that allows you to redeem products or services based on their availability. The code can be used online or at the physical store. Physical gift cards have been here for quite a long time. Since they are tangible, they hold a lot more emotional value. Digital gift cards and instant delivery that it offers are much more in line with today’s fast-paced life. The role of digital gift cards in modern gifting is only going to become bigger as we move forward.

Consumer preference for e-gift cards is on the higher side because of a variety of factors. Let’s look at why choose digital over physical gift cards.

It Offers Instant Gratification:

You can send digital gift cards to anyone via any channel, let it be SMS, email, or a mobile app. The delivery is instant. There is no approval process. As soon as the payment is made, the gift card is ready to be used. You don’t have to stand in line or be bogged down by traffic. Your Christmas or New Year’s shopping for your loved ones can be completed with a few click-clacks on your keyboard. Digital gift cards make it as simple as that. E-gift cards for last-minute gifts are a selling point in themselves.

Personalization Features in Digital Gift Cards:

The customization options for e-gift cards make a huge difference when it comes to impact. You can add your entire suite of brand identity elements to your digital gift cards. What makes a gift more valuable than the money attached to it is the emotions that it evokes. By adding customization elements, you can make the recipient elicit emotions.

Environmental Impact of Digital Gift Cards:

The best part about digital gift cards is that it hardly impacts the environment. Why? A report says that 2.3 million trees must have been planted to compensate for the CO2 produced from the production and transport of gift cards between 2005 and 2012. On top of this, more than 10 million physical gift cards produced every year are equivalent to 50,700 tons of plastic.

All physical gift cards have some amount of plastic in them, this is something you don’t have to worry about with digital gift cards. The convenience of e-gift cards is not only about how easy it is to buy and send them but also its environmental advantages. These days, customers are also interested in associating themselves with businesses that care about the environment and follow sustainable business practices.

Secure Payment Methods for Digital Gift Cards:

Physical gift cards can only be taken away physically. There have been significant online security protocols and encryption technology that have enhanced the security of online transactions. Therefore, digital gift cards are even more secure than physical gift cards these days as they cannot be stolen from you either. The only way this can happen is through social engineering where the victim is persuaded by cyber thieves to give away your online details. Using this, the cyber thief can access your system, check where your gift card is available, copy the code, and use it for themselves. The chances of something like this happening are bleak. Security in digital gift card transactions is something you don’t have to worry about since there are fraud monitoring features and security codes that are used for protection.

Integration Options:

The best part about using gift card software is that it comes with the option to integrate with third-party apps. By integrating your CRM software with the gift card software, you will be able to have a 360-degree visual of your customers. The same can be applied to a variety of other apps, all of which enhance the effectiveness with which you operate your eCommerce business. Digital gift cards in the age of technology are a gift that keeps on giving because it is more than just a gift card.

Better Accessibility of E-Gift Cards:

One of the main advantages of digital gift cards is that you can buy them from any part of the world. You can be sure that it offers several payment options to complete the purchase. The recipient also gets it instantly. In the case of physical gift cards, you might have to wait for a week or more, in some cases.

Wrapping Up:

The easier redemption process for digital gift cards is one of the basic advantages that it offers. Except for the part where physical gift cards can be used as a souvenir, digital gift cards are ahead in every other area. With the increasingly connected digital world where most things are done using our smartphones, no one is surprised that digital gift cards are preferred more. The incredible choices, features, and benefits of digital gift cards cannot be surpassed by physical gift cards. The verdict is clear. To offer digital cards, you must work with a software provider who knows how to incorporate the right functionalities and features. Do remember that the best gift card is one that the eventual recipient.

Loyalty programs and digital gift card adoption go hand-in-hand if you use the right software for it. If you want to offer mobile-friendly gift card options for your customers, the team at 99minds would be thrilled to help you out.