Digital Gift Cards Rising in Popularity

Consumers are increasingly looking to purchase digital gift cards, particularly for this holiday season and beyond, according to a new research study conducted by InComm, in which respondents answered questions about their purchasing habits and intentions for purchasing gift cards from websites and mobile devices -- as well as digital cards specifically.

“We believe it’s important for retailers and brands to augment their in-store gift card selection by enabling consumers to easily purchase both physical and digital gift cards from their desktops and mobile devices,” said Mike Fletcher, SVP sales and marketing, digital solutions, InComm. “Brands can dramatically improve sales throughout the year – especially at the holidays – by opening up gift card sales through all channels. This research shows that consumers want more options for buying and sending gift cards, giving retailers even more reason to expand their offering and ensure an optimal shopping experience for the gift giver and receiver.”

Study highlights:

• Eighty-eight of those surveyed agree they’re likely to purchase at least one gift card from an online website or mobile website/app this holiday season, with 77 percent likely to purchase at least one digital gift card.
• Of those who intend to purchase gift cards from online websites or mobile websites/apps this holiday season, 20 percent plan to purchase more than five gift cards.
• Forty percent prefer to have a digital gift card scanned from their phone rather than carry an email printout.
• Nearly 70 percent strongly agree that they are more interested in purchasing digital gift cards now than they were two to three years ago.
• Nearly 20 percent of those who have purchased gift cards from online websites or mobile websites/apps purchase five to seven cards annually.

Of those who have bought a gift card from an online website or a mobile website/app, 36 percent have purchased a physical gift card, while 33 percent have purchased a digital gift card and 31 percent have purchased both.

When deciding whether to purchase a digital gift card or a physical gift card, nearly 40 percent state that it depends on who they’re buying the card for. In fact, 87 percent prefer to have the option to purchase either a physical gift card or a digital gift card when purchasing gift cards from online websites or mobile websites/apps.

2013 Holiday Intentions

Participants were asked how many gift cards they intend to purchase from online websites or mobile websites/apps this holiday season:

• Nine percent are likely to buy one.
• Forty-eight percent are likely to buy two to three.
• Twenty-three percent are likely to buy four to five.
• Twenty-one percent are likely to buy more than five.

Beyond the holidays, 82 percent of respondents said they are likely to buy at least one gift card from an online website or mobile website/app in 2014, while about three-quarters are likely to buy at least one digital gift card.

Nearly 70 percent said they are more interested in purchasing digital gift cards now than they were two to three years ago. Also, 46 percent are interested in storing digital gift cards on their phones, and 40 percent prefer to have a digital gift card scanned from their phone rather than carry an email printout if they were to receive a digital gift card.

Reasons for purchasing digital gift cards included instant delivery (62 percent); ease of sending (42 percent); easier/quicker to purchase (32 percent); are a “cool” gift to give (28 percent); easier to redeem (26 percent); and environmentally friendly (21 percent).

Of the types of merchants from which consumers purchased gift cards online, restaurants/casual dining rank highest, cited by 54 percent of respondents, followed by department stores (44 percent), online-only retailers (35 percent). Only 21 percent named grocers as the type of merchants from which they buy gift cards online.