Gift cards have become one of the most popular gift items in recent times. Their usage and popularity has grown exponentially over the past decade.

Growing retail sales

Retail gift card sales have been on an upward trend for many years now. According to recent reports, total retail gift card sales in 2021 topped $130 billion, rising over 15% from the previous year. E-commerce and big retail chains dominate gift card sales, accounting for nearly 70% of total sales. Department stores, restaurants, and tech retailers have embraced gift cards as an important part of their holiday sales strategy. Gift cards allow customers to spend money at desired retailers while driving additional foot traffic and sales all year round.

Emergence of gift card exchanges

With the rise of unused and unredeemed Gift Card, innovative gift card exchange platforms have emerged. These digital marketplaces allow users to sell unused gift cards for cash at a discounted price. Top gift card exchange sites see millions of gift cards change hands annually. Users can liquidate unwanted cards and get money to spend elsewhere. On the other hand, buyers get deep discounts on gift cards they can use for shopping and dining. Sites like CardCash and Raise have made it easy to resell and purchase gift cards online. This has further increased the circulation of money within the gift card economy.

Dominance in corporate gifting

Gift cards have become the top choice for corporate gifting as well. HR departments and event organizers are increasingly opting for digital gift cards that can be distributed en masse to employees and clients. Employee appreciation programs, client thank you packages, and conference goodie bags are filled with gift cards these days. Digital delivery and near-instant redemption make gift cards a convenient corporate gifting option. Major gift card providers like Tango Card and Blackhawk offer specialized business gifting solutions tailored for small and large companies. It’s projected that B2B gift card spending will reach $60 billion by 2024.

Personalization and customization driving demand

Gift Card retailers have significantly upped the personalization factor in recent times. Customers can now design and order customized gift cards featuring names, photos, logos and messages. For special occasions like birthdays, anniversaries and weddings, personalized gift cards present a thoughtful gift. Top gift card brands allow free or paid customization services online and in stores. Personalized digital e-gift cards that can be scheduled for delivery on a desired date have also gained popularity. Consumers are willing to pay more for gift cards with a customized touch, driving even higher sales.

Gift card innovations attracting younger audiences

Digital wallet integration and innovative Gift Card products are appealing greatly to tech-savvy Gen Z and millennial shoppers. Apps and websites that allow adding gift cards to digital payment platforms like Apple Pay, Google Pay and Samsung Pay have seen increased traction. Digital gift cards with no physical plastic cards are a preferred option for many. Brands are also launching interactive gift cards featuring AR filters, games, exclusive deals and digital content. With a focus on experience and instant gratification, younger shoppers are actively experimenting with innovative gift card solutions. Savvy retailers are leveraging emerging technologies to boost gift card adoption among new-age audiences.

Rise of gift cards in shared spaces

With the boom in co-working spaces and co-living communities in urban centers, the role of gift cards as shared gifts is rising. For birthdays in large coworking offices or community celebrations in residential buildings, gift cards provide a thoughtful shared option. Retailers have specially designed group gift cards for occasions where multiple recipients are involved. Digital group gift cards aimed at offices, communities and clubs allow splitting the value and sharing redemption individually. As social interaction increases in hybrid work and living models, gift cards perfectly suit gifting needs within shared professional and residential spaces.

Global expansion

Once a phenomenon majorly concentrated in the US and European markets, gift cards have truly gone global in recent times. Large corporations are extending successful localized gift card programs to international markets. Simultaneously, new digital platforms have launched globally, allowing person to person gift card transfers across borders. Popular international hotel, retail and restaurant chains heavily promote gift cards to drive international sales and reward member spend globally. Countries across Asia Pacific and Latin America are witnessing a steady boom in gift card usage backed by growing spending power. The gift card market size is estimated to cross $500 billion worldwide by 2027.

Market consolidation

With massive total spends locked in gift cards, consolidation in the gift card industry has accelerated over the past few years. Large payment companies have acquired several small and mid-sized gift card businesses to gain synergies and market share. The gift card issuing and processing market is dominated by few big players globally. Major acquisitions in the space include Blackhawk Network’s buyouts of services like GiftCardMall, Plastyc and goeuro. Similarly, global payments giant InComm acquired leading digital gift card firm Gyft in 2017. Such strategic moves have further consolidated industry operations while unlocking new growth opportunities.

Counterfeit control and security measures

Counterfeiting has been a concern plaguing certain segments of the gift card industry. However, advanced technologies incorporated by top players have significantly curbed the sale of fake cards. Digital wallet integration, tokenization of card details, AI-based fraud detection and one-time PIN provide robust safeguards. Two-factor authentication for high value transactions further strengthens security. Additionally, federal laws across regions have enhanced penalties for trafficking counterfeit cards. Consumers can rely on top gift card providers safe in the knowledge that advanced security protocols minimize the risks of fraud.

This in-depth look highlighted the diverse trends fueling the rapid growth of gift cards across industries over the past decade. From rising retail sales to innovative products, personalization, global expansion and market consolidation – gift cards are clearly here to stay as a preferred gifting choice. Multiple factors reinforce their dominant position for years to come.

*Note:
1.  Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it