Dramatic Surge in Digital Gift Cards

Dramatic Surge in Digital Gift Cards

January 11, 2016         Written By John H. Oldshue

Americans now want to purchase and use gift cards digitally. An InComm survey shows that 89% of consumers have purchased two or more gift cards online or via their mobile device, and 96% of consumers are interested in storing digital gift cards on their phones for self-use.

A year ago, only 72% of respondents had purchased at least one gift card from a mobile or online website.

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InComm, a company that specializes in prepaid products and transaction services, surveyed more than 500 respondents to determine consumer gift card purchasing habits. Highlights of their findings include:

  • 94% of respondents said they planned to purchase two or more gift cards online or via their mobile device, and 76% said they would buy at least one digital gift card (a card that is emailed to a recipient). Respondents said the decision to buy a traditional or digital card depended on the gift recipient.
  • 23% of the respondents shopping for gift cards on mobile websites said they planned to buy five or more gift cards.
  • Respondents between the ages of 18 and 25 seemed most likely to purchase a digital card (84%). 90% of this age group said they were more interested in buying digital gift cards than they had been two to three years ago.
  • 81% of 18- to 25-year-olds said they wanted to store and use gift cards on their phones (71% of all respondents wanted to do the same). Slightly older consumers (26-35) would rather have their digital gift cards scanned from their phone than have an email printout (66%).
  • Almost 41% of consumers who have purchased gift cards online or via mobile websites/apps purchase 5 to 10 cards every year.

“While the percentage of consumers purchasing only physical cards went down, given the increased percentage of those who have purchased both physical and digital cards in comparison to results received last year, digital gift cards continue to gain in popularity,” stated Mike Fletcher, general manager, digital solutions, InComm.

Of respondents who belong to at least one loyalty program (84% of those surveyed), 41% said gift cards were their preferred method of redeeming loyalty points. When asked how they would like to be rewarded for a purchase, 52% said they would choose a prepaid Visa card and 40% would choose a gift card.

“Retailers can drive online sales as well as brick-and-mortar traffic by offering consumers both physical and digital cards and ensuring a retail process that accounts for the redemption of prepaid cards through mobile means,” said Fletcher. “This study demonstrates the continued consumer adoption of digital prepaid cards across all age demographics. It also shows the significant increase in digital prepaid being employed by consumers for self-use. Retailers need to keep these consumer trends in mind in order to continue providing consistent excellence in customer service and support across all channels.”

The information contained within this article was accurate as of January 11, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.
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