From Inflation to Sustainability, How Gift Cards Are Helping Address Real World Issues
Nearly 30 years after its introduction as a method for consumers to pay for Blockbuster video rentals, the gift card has evolved from a simple paper gift certificate to a multipurpose tool that brands and consumers are putting to use in new and innovative ways.
According to the Annual U.S. Prepaid Consumer Insights Study from Fiserv, the modern gift card is being used to stretch consumer buying power and combat inflation, to recognize and incentivize employees, and as a point of innovation to support sustainability and social good. Here are a few takeaways from the 20th edition of our annual survey as well as strategies for businesses looking to modernize their gift card programs.
Consumers Are Using Gift Cards to Stretch Their Dollars
With inflation straining consumer wallets, gift card promotions that offer discounts or bonuses have become popular among consumers. In fact, 67 percent of consumers surveyed said these promotions influence them to purchase more gift cards from a retailer, and 54 percent purchased a gift card because of a promotional offer.
Savvy retailers are leaning into the trend and using creative promotions to drive current and future gift card sales. Discounts and bonus cards are a great place to start, but we're also seeing retailers partner with complementary businesses on creative promotions, such as prepaid “dinner and a movie” cards offered by theatres and restaurants to give consumers the ability to purchase a discounted date night.
Sixty-three percent of consumers say that gift cards made from sustainable or biodegradable materials are an important innovation, and 49 percent of consumers said a company’s position on sustainability influences their desire to purchase from that business.
As consumers increasingly care about the social posture of the brands from which they buy, retailers can leverage their gift card programs to have a positive environmental and social impact. In fact, many brands are moving away from plastic gift cards — and not just in favor of digital. Recent innovations are allowing brands to use cards that place a magnetic stripe on paper and even wooden cards. Other brands are using their gift card programs as a channel for giving back, such as a restaurant chain that donated a free meal to local hospital workers for every $10 gift card a customer purchased.
Physical Gift Cards Are Still Preferred
While digital gift cards are growing in popularity, 62 percent of consumers still prefer physical gift cards because they offer them a tangible gift to wrap, place in a greeting card, or stuff in a stocking.
While digital innovation remains top of mind, the tried-and-true physical card continues to offer plenty of benefits. Keeping physical cards stocked and visible at the checkout counter is essential, as they remain the preferred grab-and-go gift for the last-minute shopper.
Gift Cards for Employees
A rapidly growing gift card trend is their adoption as the preferred incentive for employees. Sixty percent of consumers surveyed received a gift card as an incentive from their employer in 2022, a significant increase from just 32 percent that received a gift card as an incentive in 2019. Furthermore, 85 percent even say they prefer a gift card over physical gifts, proving that today’s employees are more than willing to forego coffee mugs and fruit baskets for a gift that provides flexibility.
For three decades gift cards have remained at the forefront of retailers’ toolkits, providing a direct means for driving sales, boosting brand awareness, and fostering customer loyalty. Now evolving consumer preferences are shaping a future for gift cards that extends well beyond allowing customers to pay with branded currency. Through innovation and creativity, retailers are using gifts cards to address the needs of the modern consumer, while continuing to build brand loyalty.
Sam Lituchy is vice president and head of gift solutions from Fiserv, a leading global provider of payments and financial services technology solutions.
Related story: 4 Creative Ways Retailers Are Using Gift Cards to Drive Sales
Sam Lituchy is Vice President and head of Gift Solutions from Fiserv, a leading global provider of payments and financial services technology solutions.