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This season isn't just going to be jolly for retailers but it's also proving to be rewarding for digital gift cards.
A new First Data study reveals e-gift card usage is on the climb, driven by those ages 18 to 34. The biggest card buyers are those ages 35 to 54. The main reason is convenience.
"Consumers want preference and they want it now — there are no exceptions to this rule when it comes to gift cards," Krista Lee, director, product marketing, network and security solutions at First Data, told Mobile Payments Today sister publication Retail Customer Experience.
"They expect convenience via mobile gifting apps while still having the option to look for the perfect plastic gift card for Mom. Bottom line, it's critical to pay attention to your customers and their gift card purchasing behavior," Lee said.
The study reveals 72 percent of consumers prefer a gift card rather than a physical gift and 57 percent of card buyers prefer to send e-gift cards as they can be delivered immediately.
"Purchasing an e-gift card is a win-win for the purchaser and the recipient," said Lee, noting 45 percent of those polled for the study opt for e-gift cards because they are easy to send and 25 percent prefer to give an e-gift card since they are easy for the recipient to redeem. The study also notes self-purchase of physical gift cards has grown from 26 percent in 2014 to 35 percent this year, and e-gift self purchasing has risen by 13 percent in 2014 to between 40 and 53 percent this year.
In addition, 36 percent of consumers indicated they are self-purchasing to receive loyalty points or rewards, followed closely by a self-purchase to receive discounts. The report stated 24 percent of consumers are self-purchasing to make online purchases and 21 percent self-purchased for the convenience of not having to carry cash.
The results, said Lee, reflect trends in play that retailers should be paying attention to in order to capitalize on consumer activity.
"Retailers should take note — with the increase in self-purchasing year over year, gift cards are quickly becoming a preferred tender type," she said.
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