A gift card is a money card that has a specified value meant to be used in a store in lieu of cash or physical money. A retailer or a bank, whichever party is appropriate for the transaction, usually issues a gift card. In some countries, a gift card is referred to as a gift certificate, a gift voucher or a gift token.
Gift Cards: Then & Now
The first gift card to be used as a means of payment was reportedly introduced by Blockbuster Entertainment in the mid-1990’s. From that day on, many companies followed in its footstep and began introducing the gift card to consumers. Today, they are widely used by many not only as gifts but to gain discounts from products and store sales. This is especially helpful for avid shoppers who are always on the lookout for bargains at their favourite stores.
Essentially, a gift card resembles a credit card with its plastic material and size. However, many retailers now use paper or email as a gift card to reduce both production and distribution cost, as well as to bring more convenience to consumers by making the cards more pocket and purse friendly. Gift cards can also include the name of the institution and recipient to make them more official and personal.
Trends in Gift Card Usage
- Digital gift cards. Aside from the tangible gift card that we can touch and use in a ‘brick and mortar’ store, there is also the digital gift card that users can access via smartphone, computer or tablet. As a result of this new trend, marketers are aiming to enhance online gift giving. The shift from offline to digital online gifts is giving marketers a bigger opportunity up increase brand recognition. Some consumers also prefer a digital gift card over a physical card for fear of losing or misplacing it.
- Bundle Products. Companies sometimes consider product bundles in their marketing efforts to capture larger audiences. Instead of selling their products per item, digital products are also encouraged to be purchased to make the tie-in of both physical and digital products.
- Loyalty Programs. Consumers who feel they get more than what they pay for tend to become more loyal to brands. Loyalty programs do this by offering deals and promotions to customers based on their purchasing history. They are an effective tool in creating value for customers at the same time as collecting valuable market information about consumer spending habits. Preferring the idea of exchanging gifts online also reduces the cost for both parties. On the part of the business, it lessens the risk of customer dissatisfaction, lost or misplaced items, and other delivery concerns. It also reduces cost on packaging and delivery. With customers, they can save the expense they would have spent for the shipping fee or the product itself. More often than not, giving a gift online costs a very minimal price.
- Limited Luxury. With holidays, gatherings, and events in every corner of the world no matter what time of the year it is, there’s always a reason to celebrate, but not everyone can afford it. Gift cards signal the same intention as a physical gift, but not in a specific sense. Rather, the receiver of a gift card can choose whatever gift he or she likes, as long as it is within the budget range of the gift card. This allows the giver to give the person a gift but also enables the latter to choose what they like.