Will Digital Gift Cards Be the Hot Technology of 2013?

Although it may seem hard to believe, gift cards only date back to 1994, when Blockbuster offered the first one as a payment option for its customers. In the nearly two decades since then, gift cards have evolved from a novelty into a retail staple, with some restaurants and stores offering special incentives to customers who buy them for others as gifts.

But did you know that as many as two out of 10 gift cards are never redeemed? Consumer Reports cautions shoppers that many of these unredeemed cards are lost, stolen, or stuck in a drawer somewhere until their expiration date has passed.

As consumers increasingly embrace mobile-wallet technologies, however, plastic gift cards could start to seem as outdated as personal checks and Blockbuster stores. Or will they?

Target is giving the concept a try, letting customers scan QR codes to send digital gift cards to friends and family. Additionally, customers who receive a plastic gift card can scan its barcode into Target’s mobile app on their smartphones and use the digital card in stores without carrying the actual card with them.

The Benefits of Digital Gift Cards

Don’t have your own mobile app? Before you write off the idea of digital gift cards, consider these five benefits:

  1. Cut production costs. Once the expense of creating an app and digital gift card is over, the savings begin. No more spending money on having gift cards manufactured and shipped, only to be tossed out once they’re used.
  2. Avoid lost cards. Every customer’s gift card is safely stored within the app or online account for easy retrieval. No more lost cards!
  3. Encourage online sales. If your website offers online shopping, your customers may feel encouraged to use their electronic gift cards online, especially if redemption codes can be copied and pasted during the checkout process.
  4. Save postage and time. Digital gift cards are a plus for customers, because they no longer have to pay postage to send them to recipients. They also don’t have to buy a greeting card to tuck the gift card inside.
  5. Enable last-minute giving. Because digital cards can be sent instantly, they’re ideal for that forgotten birthday or anniversary. If a customer comes into your store in a panic, you can point them toward the digital cards and meet their needs immediately.

As large retailers increasingly adopt mobile technologies, customers will likely grow to expect similar capabilities from smaller, local businesses. If you don’t yet have a mobile app, consider that more customers than ever want their smartphones and tablets to connect with the businesses they love — including yours.

About Stephanie Faris

Stephanie is a freelance writer and young adult/middle grade novelist, who also works in information systems. Her first book, 30 Days of No Gossip, will be released by Simon and Schuster in spring 2014. She lives in Nashville with her husband.
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