5 Ways To Accelerate The Adoption Of Digital Gift Cards | EJ Gift Cards

Digital gift cards are one of the most quickly-growing market segments in the US gift card market. By 2018, digital gift cards are going to represent more than $18 billion in gift card sales – around 11% of the total market share.

Despite this, it’s quite possible that you have never given – or received – a digital gift card. And when you think about it, this is quite shocking. After all, you probably have a smartphone – the perfect device through which you can buy, receive, and redeem digital gift cards!

Yet, even in 2017, digital gift cards are still a bit of a niche product. They’re primarily given when there is no option to give a physical gift as an alternative – if someone you know lives far away and you can’t give them a physical gift card, you might give them a digital card instead.

And while this is all well and good, digital gift cards shouldn’t just be seen as a way to augment physical gift cards – if they’re implemented correctly by businesses, digital gift cards could easily become the “de facto” gift card used by consumers.

If digital gift cards replace physical gift cards as the most common form of store credit-based payment, retailers could enjoy a number of advantages.

First, digital gift cards are basically fraud proof. Physical gift cards can often be stolen or activated by thieves – even after a legitimate customer buys them. This reduces consumer trust in gift cards, and damages the reputation of a retailer affected by such a scam.

Digital gift cards are also cheaper than physical gift cards, as retailers don’t have to invest in the plastic used to create traditional gift cards. This may not seem like much of a cost savings, but PVC-based gift cards typically cost retailers around 7-12 cents to manufacture per card. If a retailer sells around 10,000 physical gift cards in a given holiday season, they’re spending $1200 – and that’s just for the raw materials used in the manufacturing process.

Given these advantages, retailers should be excited about the increasing popularity of e-gift cards – and do everything in their power to accelerate their adoption, and allow their market share to grow in the future.

In this article, we’ll take a look at a few of the best ways that merchants can spur the adoption of digital gift cards, and enjoy cost savings, better security – and more satisfied customers.

1. Easy Online Checkout Processes

The consumer experience of purchasing a digital gift card is absolutely crucial to a successful digital gift card program. This experience doesn’t just encompass the actual purchasing of the card – but the entire online shopping experience.

From beginning to end, consumers demand an easy, intuitive shopping process. If they’re looking for a digital gift card from a merchant, it should be clear how they can buy one – and what next steps they need to take to complete the transaction.

This is especially true when it comes to older folks – while millennials and other young consumers have indicated that they enjoy buying, redeeming, and using digital gift cards, older people have fallen behind. This is because young people are more likely to be able to navigate more complex online purchasing menus and intuitively understand the buying process.

Older consumers, on the other hand, are less successful at navigating through menus, special promotions, and popups in order to buy digital gift cards, and they’re likely to get frustrated and abandon their purchase if they are unable to purchase a digital gift card easily.

Because of this, retailers who offer digital gift cards should streamline their purchasing process as much as possible. Younger consumers will appreciate the simplicity of the design, and older consumers will be able to navigate through websites and make purchases more easily.

2. Omnichannel Support


Omnichannel support is absolutely critical in digital gift cards. When a consumer buys a physical gift card from a retailer like Target, they expect to be able to use it both in-person at a brick-and-mortar Target store, and online at the retailer’s website. This same expectation holds if a consumer buys a digital gift card – it’s expected that you can redeem it both online and in-person. This is the heart of “omnichannel” support.

Essentially, “omnichannel” gift cards allow consumers to make purchases with their gift cards on any platform where your company has a retail presence – online, in-person, or even through mail-order catalogs or the phone, in some cases. Digital gift cards must support omnichannel purchasing if they are to continue to grow in market share.

The reason is simple – if digital gift cards can’t be used in-person, they’re inferior to physical gift cards that can be used both in person and online. This will, in turn, cause consumer trust in digital gift cards to fall.

Omnichannel support allows digital gift cards to compete on a 1:1 basis with physical gift cards – allowing consumers to have a consistent gifting or purchasing experience, no matter which method they choose.

3. Delightful Delivery Methods

Delivery methods have often been an issue with digital gift cards. The most common method of delivery is email, which isn’t exactly ideal. First, some people don’t check their email very often – they may miss the notification of a gift card purchase unless they’ve been told to look out for it.

Second, many people associate email with spam – especially if there is a gift card offer associated with it. It’s common for phishing scams to promise rewards in the form of gift cards, in exchange for filling out a survey or giving away personal information.

Finally, email is outdated – and not usually associated with fun. Email is for work – not for play. For digital gift cards to truly become commonplace, we have to seek a different delivery method that’s more fun, delightful, and exciting.

Starbucks has long been an innovator in the world of digital gift cards – and again, they’ve shown us a great path forward. On April 4, the coffee giant released an update to their My Starbucks app which allows for easy integration with the iOS iMessage SMS application.

Among other features, this update allows for a streamlined, intuitive digital gift card purchasing process – and delivery of these gift cards directly over iMessage. Gift card buyers can use Apple Pay to purchase digital gift cards in $5, $10, and $25 denominations – directly within the iMessage app.

After purchasing, the card is sent directly to the recipient with easy instructions regarding redemption and usage. This method of delivery is much more personal – rather than an email, which is usually associated with work responsibilities, the gift card is delivered directly from the gift card buyer – and sent to the personal phone of the recipient. There is no need to comb through spam emails. This delivery method is simple, elegant, and provides a totally fantastic experience for both gift card buyers and recipients.

Innovative delivery methods like this represent a huge area where digital gift cards can be improved, and retailers would be wise to take note of this recent strategy by Starbucks, and emulate it to the best of their abilities.

4. Intuitive Redemption Processes

Redeeming a digital gift card online is usually as simple as copy-pasting the information that’s been sent to you. However, in-person redemption of a digital gift card can often be more difficult.

While some retailers offer scanners and PoS systems that can read QR codes and other barcodes directly off of smartphone screens, there are other retailers who still require a physical print-out of the digital gift card in order to redeem it.

This poses a big problem to digital gift card users – the problem of inconsistency. When a physical gift card is purchased, it’s consistent. You know how to use it – you enter the information online to redeem it, or hand it to the cashier. It’s just that simple. But when you use a digital gift card, your experience may be inconsistent. Every retailer has a different redemption process – and if you don’t know what that process is, you may be turned away by the cashier, or unable to use your gift card balance. Maybe you can’t use the digital version of your gift card in person, or you need to print out a special code. All of these special requirements make the usage of digital gift cards confusing and frustrating – and reduce the trust consumers have in the method of gift card purchasing.

Because of this, it’s important that retailers look to simplify their digital gift card redemption processes, and implement a set of industry standards for the purchasing, usage, and redemption of digital gift cards.

These industry standards already exist for physical gift cards, so extending them to the digital realm will certainly make the usage and redemption of digital gift cards more consistent, and increase consumer trust in digital gift cards.

5. Address Concerns About Security

We mentioned above that digital gift cards are much safer than physical cards when it comes to issues of fraud and security – and that’s 100% true. So why is this topic even here? It’s simple – consumers still don’t understand digital gift cards. This lack of understanding leads to concerns about the security and safety of digital gift cards – as seen in a study released by Stored Value Solutions (SVS) in 2015.

According to the study, consumers were mostly unfamiliar with the digital gift card purchasing and redemption process. 64% of all consumers had not yet purchased a digital gift card – though this number was only 29% of millennials (18-34).

There were several primary concerns about the security of digital gift cards that were brought up in this study, including:

  • The purchasing process – Consumers were concerned that there may be “glitches” that prevent the purchasing process from being completed, or that there was no way to confirm the purchase of a digital gift card.
  • Sending the gift cards – Consumers expressed concern that there would be no confirmation of delivery if a digital gift card was purchased, or that they may not be able to resend an email if they enter the wrong email address.
  • Activation of gift cards by recipient – Consumers also expressed concern that digital gift cards may not be able to correctly activate and use digital gift cards.
  • Now, each one of these concerns can easily be addressed by a modern digital gift card system – but the fact remains that consumers are mostly unfamiliar with the process of buying and using digital gift cards.This means that the primary way to address these concerns is with education. If your retail business sells digital gift cards, you should offer an easy-to-understand FAQ, a step-by-step instructional process that’s used during checkout, and a robust customer support staff. Providing these resources and tools to consumers can help them understand the process of buying and using digital gift cards, and increase their confidence in your retail business. 

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