Gift cards have become a popular gift choice among consumers for friends, family, colleagues, and even oneself. In fact, “the global gift card market is valued at $899.3 billion and is expected to reach $2.3 trillion by 2030.” In the US market alone, gift cards generated a revenue of nearly 500 million in 2022.1 Now’s the time for small businesses to embrace gift cards–both physical and digital.
In spite of unpredictable markets and sluggish economies, 2023 saw 69% of consumers purchase the same amount in gift cards or more compared to 2022, with 40% putting at least $50 on gift cards–that’s a 33% increase from 2022. What’s more, a whopping 79% of consumers say they’ll spend more than the value of the gift card at a retailer.2
It’s prime time for gift cards. And that means small businesses should capitalize on the global gift card trend by offering consumers physical and digital gift cards. So, why the need for both physical and digital gift card formats?
Consumers are generally split 50/50 on their preference for digital and physical gift cards. Read on for more information about each type of gift card and why both options can benefit your business.
READ: 4 advantages of gift cards
Physical gift cards can be loaded, and sometimes reloaded, with cash value and used as a cash equivalent to make in-store and online purchases.
The most significant reason why many consumers lean towards physical gift cards is tangibility–they can be held, wrapped, packaged, and stored just like any other physical item. To that point, a recent Fiserv consumer survey found that 85% of participants like the idea of giving an actual card or gift and 52% want the recipient to unwrap a gift.3
READ: How to boost gift card sales
In addition to tangibility, physical gift cards offer some stand-out benefits to consumers and businesses. Here are five, for starters.
Digital gift cards have no physical form. Instead, a digital gift card is a unique code or number that’s issued to a customer for making purchases at online or brick-and-mortar retailers. What’s more, they offer givers instant, or near-instant, delivery to the recipient.
Speed and agility are the preeminent reasons many consumers prefer digital cards to physical cards. Sending and delivering a digital card is typically faster than locating, packaging, and sending physical cards and can be done on-the-go, anytime, and from just about any device.
Case in point, in a recent survey sponsored by Fiserv, 63% of participants said they preferred digital gift cards to physical cards because of immediate delivery, 53% said they’re easier to send than mailing physical cards, and 50% said they’re easier to purchase than physical cards.3 Even better, digital cards can be sent by email or SMS text, making them just about universally accessible.
Beyond speed and agility, digital gift cards offer these perks to consumers and businesses.
READ: How these Clover merchants are using gift cards
Both physical and digital gift cards can help boost sales, reduce fraud, and simplify the gift-giving and purchasing process. Businesses can get the most out of gift card sales by offering both digital and physical card options and letting their customers choose the format they prefer.
Clover makes managing a physical and digital gift card program simple, speedy, and efficient. Clover Gift Cards are available through your Clover device dashboard and offer over 70 design templates to choose from. Or, you can upload your own custom-branded design. You have instant access to self-service Clover Gift Card ordering and can track gift card sales and redemptions easily with Clover Gift Card reports.
Already have a gift card program? Converting an existing program to Clover Gift Cards is a snap. And, a Clover Business Consultant is always standing by with a helping hand.
1 https://capitaloneshopping.com/research/gift-card-statistics/
2 https://www.persistencemarketresearch.com/market-research/gift-card-market.asp
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