The Future of Gift Cards – Who Is Leading the Way this Christmas?

Written by Hadie Perkas, Founder of The Gift Club and The Hub


With shipping and manufacturing delays affecting nearly every industry, buyers seek strategic ways to buy and send gifts this holiday season. Many are looking to avoid delays or lost shipments to give gift cards – in hopes that recipients can buy and receive the gifts they want when supply meets demand.

According to Blackhawk Network, gift card purchases are expected to rise by nearly 27% during the 2021 holiday shopping season. That percentage comes out to almost $270 or £202 /€239 per person – a sharp rise in gift investment!

However, does the rise in gift card purchases point to a shift in view on gift card giving? If so, who is leading the way – and how can businesses take advantage of this shift for the year to come?

Generational Gift Card Behaviour Is Shifting

Gift cards continue to be a critical method for gift-giving, but the behaviour is shifting.

For years, gift cards saw their most significant purchasing power during the holiday season (albeit as a less-than-desired gift.) However, pandemic-era shopping and generational value shifts have continued to change the gift card giving landscape.

While supply chain issues may be the root of the rise in popularity across all demographics, two generations are leading the pack on gift card adoption: Millenials and Gen Z.

Gift Cards Riding the Wave of Digital Wallets

The “digital natives” of today’s consumer base are increasingly comfortable with using gift cards to make purchases.

Just don’t call them gift cards. Instead, online transactions, digital wallets, and loyalty apps are driving significant investments in the gift card industry.

Millennials and Gen Z are driving much of this behaviour. Many users credit their ease with digital wallets, eliminating the need to store cards or track where they are in transit.

Consider the statistics of Millennial and Gen Z gift card use:

  • Due to convenience and gifting anxiety, Blackhawk found that 75% of millennials would rather receive a gift card than a physical present.
  • 39% of Millennials and 41% of Gen Z buyers, survey report buying digital gift cards every three months.
  • 72% of Millennials surveyed reported using digital gift cards regularly, with 60% using them through digital wallets on mobile devices.
  • Gen Z buyers are savvier at finding deals online and buying through reward apps, with 28% saying they shop with these apps regularly.
  • 41% of UAE Millennials surveyed said they planned to buy more gift cards to avoid shipping snafus entirely.

Interestingly, a common thread to all studies is that purchasing gift cards – especially online – may be related less to avoiding delays and more to the mere convenience that gift cards offer.

Convenience is Key

Shocking results from recent studies into wasted physical gift card value shows how the shift to digital purchases changes gift card behaviour. A survey from found that over 50% of US adults forgot to use gift cards that still had value on them – with a loss of nearly 15 billion dollars.

Global supply issues further push this risk. If physical gift card recipients fear that their products won’t be in stock, they may choose to wait until later to use them. Unfortunately, as the studies show, this can increase the likelihood that those gift cards will be forgotten or lost.

As digital purchasing wins out over in-person, the ability to buy, load, or send a digital gift card online is simply winning out over physical cards. Generations that are comfortable using digital wallets and reward apps are driving this behaviour.

As users of services like Apple Pay, Google Wallet, and others begin to spread throughout the consumer base, businesses’ that drive innovation around these technologies will win out over those that don’t.

Although it is not a requirement for your business to accept gift cards on mobile devices (yet) – it should be.

How Can Brands Maximize On Gift Card Potential?

Studies continue to show that social media is driving consumer spending with Millennials and Gen Z shoppers. 87% of Gen Z individuals use social media to drive their buying habits, creating golden opportunities for companies to expand into the gifting business.

So how can businesses take advantage of this shift in consumer behaviour? By ensuring that they are targeting the right customers with the best possible retention strategies.

1. Move to Mobile

According to Retail Dive, Gen Z responds and converts to marketing on mobile devices at nearly twice the rate as other groups surveyed. Brands that want to enhance their gift card sales should consider expanding their gift card presence. Mobile is the future of gift cards, and your company needs to adapt.

2. Offer Greater Gift Card Style and Variety

Are physical gift cards dead? As we’ve seen in the studies listed, the answer depends on the generation. While Gen X and Baby Boomers are more likely to use physical gift cards, digital gift cards are becoming more popular with younger buyers.

Don’t put all your gift card eggs in one basket. Choose what’s appropriate for your customers and offer various options such as digital or physical gift cards, retailer-specific gift cards, or digital gift cards that can be sent and reloaded online.

3. Be Honest and Transparent with Stock, and Use Gift Cards Strategically

With shipping delays continuing to plague countries around the globe, consumers are looking for honesty when it comes to their purchases. Consider under promising and over delivering in your stock and shipping processes, and utilise gift cards to make up for any problems.

If you’re not excited about your gift card merchandise, the chances are that your customers won’t be either. Evaluate how gift cards can increase or expand your customer base to ensure that the transactions are worthwhile.

4. Highlight Ease of Use

Remember: your customers want simple and easy solutions when it comes to finding presents. Resist the urge to overcomplicate their shopping experience. Rather than purchasing a product that the receiver may not necessarily enjoy, gift cards allow users flexibility and control.

Gift cards can also provide savings for your customers. Many retailers offer discounts on gift cards, making them an attractive option for savvy shoppers. Track how often people use gift cards at your location and experiment with adding selective discounts that encourage card usage.

5. Let Customers Manage Their Cards

When customers purchase a physical gift card, it is crucial to make the process intuitive and straightforward. Allow them to add more money when they need to and provide users with the ability to manage their cards online in many cases.

Give customers multiple options when they want to claim or use their cards – offer digital options if possible, and allow them to send the gift cards to their friends.

6. Create Loyalty Programs Around Your Gift Cards

Offering coupons or other incentives for customers can provide a sense of community and loyalty between you and your clientele, especially since they are spending money at your location. When they use their gift cards, offer additional benefits to encourage more purchasing.

For example, if you know that your card users visit your restaurant frequently, consider offering a discount on their next meal to get them through the door again.

Get Creative With The Gift Club

Your business can’t afford to ignore how consumer buying habits are shifting over time – if you have not yet capitalized on the benefits of digital gifting, now is the time to do so.

Digital cards are more popular than physical gift cards, with younger generations looking to purchase their devices. While Gen Z already spends most of its time on mobile devices, digital gift cards allow companies to market directly.

Don’t wait for customers to come to you – reach out and expand your gift card reach. Learn how to maximize your gift card and loyalty potential by searching for a specialist vendor or loyalty agency listed in The Gift Club’s Business DirectoryOr email and we can introduce you to one of our suppliers.


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