Digital Gift Cards on the Rise

While gift cards are still made of plastic, digitally formatted gifts cards are increasing in popularity. (According to research by payments giant First Data, electronic gift card sales grew 71% from 2012 to 2013.) Consumers particularly like the customization options — including video and audio in some instances — that some retailers offer with digital cards. Another popular option: the ability to load a digital card onto a mobile device

Here are a few other unique benefits digital gift cards offer:

• Unforgettable: “The challenge with plastic gift cards is that consumers forget or lose them,” said C.J. MacDonald, co-founder of San Francisco-based digital gift card platform provider Gyft Inc., which was recently acquired by First Data. “Digital gift cards solve this problem by giving consumers the ability to have access to them at all times.”

• Promotable: Digital gift cards can be used as holiday promotional tools in several ways. For example, they are perfect for last-minute gift promotions since they can be instantly bought and delivered, and can also be offered as an instant incentive to promote customer shopping and store visits.

“A gift card platform can be used like a supercharged digital couponing platform, because there is real stored value,” said MacDonald. “You can limit the use of a promotional card to one user for a finite period of time, with low cost of delivery.”

• Findable: Digital gift cards can also serve as a handy location-based marketing tool.

“A digital gift card is a mobile device,” said Lisa Gamby, director of marketing at InComm, whose prepaid card technology helps support Gyft’s platform. “With Gyft you can do geonotification pushes and send customers reminders and offers when they are near a store to drive foot traffic.”

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