Consumers Prefer Physical Gift Cards, Despite Digital Growth
- Physical gift cards are still preferred by just over half (54%) of consumers, according to a new study from payment company Fiservdespite the rise of digital maps. This is similar to data from a 2019 study which also showed physical gift cards were preferred by both purchasers and recipients, although more of those who gave than those who received had a preference for the tangible card.
- But just like the covid-19 Pandemic has accelerated payments innovation, fueled the rise of digital gift cards: In the past two years, 48% of consumers surveyed said they purchased more digital gift cards than cards physical. the A 2019 study found that 53% of consumers bought physical gift cards, compared to 27% who bought digital ones.
- About 37% have stored a gift card on a mobile app, and a third load the gift cards they receive into their mobile wallets, The new study from Fiserv found. Consumer awareness of storing gift cards on mobile apps has increased: 51% know they have this option, up from just 25% who said so in 2019.
Overview of the dive:
Most consumers told Fiserv that the COVID-19 pandemic has not affected their gift card buying habits, and the Brookfield, Wis.-based payments giant said the prevalence of the Digital purchase and delivery had kept the gift card market stable over the past two years.
Encouraged by the pandemic and the shift to faster, contactless payments, more consumers switched to mobile wallets to shop. The Federal Reserve has said that some of these pandemic-induced effects changes in payments could be here to stay. Based on the increases discovered by Fiserv, this also appears to apply to the gift card market.
Those who prefer digital gift cards appreciate immediate delivery (77%), easier to send (62%) and easier to buy (50%). Traditionalists who opt for physical gift cards prefer them as a tangible gift (61%), that the recipient has something to unwrap (46%) and ease of giving and using (39%), by Fiserv, which manages gift card services for thousands of merchants.
With nearly half of consumers turning to digital gift cards over physical ones during the pandemic, the Fiserv study noted the recent increase in e-gift card innovations, such as scheduled delivery and the ability to personalize gift cards with personal photos. Around 55% are interested in a gift card that can be used at any local restaurant, and 35% want to see a mobile platform where all gift cards can be stored.
In 2019, only 12% of consumers had received a gift card by SMS; that figure rose to 28% in 2021. Similarly, only 10% of consumers purchased a gift card through a merchant’s app in 2019, and that figure rose to 25% in 2021, Fiserv found.
Most consumers – around 70% – primarily purchase gift cards for others, with holidays and special events being the most popular giving occasions. But almost 20% of consumers buy gift cards for their own use, with more benefits reported like discounts received by buying gift cards (45% in 2021, up from 35% in 2019), loyalty offers or rewards (44% in 2021, compared to 30% in 2019) and shopping online (32% in 2021, compared to 25% in 2019).
Nearly three-quarters of consumers prefer to purchase gift cards from a single merchant. More than half (53%) of consumers buy gift cards from online merchants like Amazon, 49% shop at discount or big box stores, and 41% collect gift cards from coffee shops.
Approximately 1,000 consumers participated in Fiserv’s 19th Annual Prepaid Consumer Survey in December 2021.