Retailers And Manufacturers Seek "Green" Solutions To Plastic Gift Cards | EJ Gift Cards

Gift cards are a great gift for any occassion – and consumers love them. Growth in gift cards is no longer astronomical, but the market is still growing at a steady pace. Gift cards offer wonderful flexibility when giving a gift, a convenient solution for consumers, and many advantages for retailers – so it’s no wonder that the gift card market continues to grow.

However, there is one interesting part of the gift card market that often goes unnoticed – the materials used for the gift cards themselves.

Almost all gift cards are made out of plastic – and in a world which struggles with large amounts of non-biodegradable, environmentally damaging plastics, many consumers are beginning to wonder if there are better ways to manufacture, sell, and use gift cards –- without damaging the environment.

And while gift cards may seem like a negligible source of plastic waste compared to, say, drink bottles and consumer packaging, their impact is far from small. It’s estimated that, in 2012, the global gift card manufacturing industry created 33 billion cards – if you gave 4 gift cards to each individual on the planet, you would still have almost 5 billion cards left over. And that’s in just one year.

In addition, the plastics used in gift cards can be harmful to the environment. PVC (Polyvinyl Chloride) is a main component in most gift card plastics, and this type of plastic can leach harmful chemicals into the environment.

It is also very difficult to biodegrade – PVC pieces simply “granulate” or become smaller over time in the environment and disperse, rather than truly biodegrading and becoming part of the environment.

This is not to say that PVC doesn’t have advantages for retailers and consumers – it does. PVC is very easy to recycle, incredibly easy to produce, and widely available all around the world. It’s also very durable and cheap – making it the go-to material for gift cards.

Most of this shift is driven by consumer attitudes. Consumers are becoming more ecologically conscious, and are becoming more aware of the impact that waste has on the environment.

A study done in 2015  indicates that consumers are more ecologically aware than ever, and that 81% of consumers say that they are willing to make personal sacrifices to address social and environmental issues.

However, it seems that most retail companies have done little to address this. Walk into any big-box retail store, and you’ll likely see a large kiosk displaying gift cards, totally covered in PVC products.

So if consumers are willing to make sacrifices to protect the environment, why aren’t retailers? Why the mismatch between perspectives?

Well, like so many other things in the retail world, it really comes down to one factor. Cost.

The Cost Question – Is It Worth Switching To A “Green” Gift Card?

You may be questioning why retailers haven’t already all switched to more “eco-friendly” gift cards. Well, some have!

In 2011, high-end grocery store Whole Foods did away with plastic gift cards completely, replacing them with a paper-pulp based solution, sourced from sustainably managed European forests. These cards are produced with a total of 30% less energy than plastic cards, and are totally biodegradable and compostable.

This decision made sense for the retailer – Whole Foods has long been known for a dedication to low environmental impacts, sustainability, and consumer choice to support products that they find to be environmentally agreeable. Allowing consumers who did not wish to buy plastic gift cards to have a choice in the matter was a natural next step.

Starbucks did something similar in 2013 – they released a limited edition, reloadable Starbucks card made out of wood, allowing consumers to choose a card made out of sustainable materials that was good for the environment.

But there are drawbacks to these cards. Namely – cost.

In 2007, Target attempted to be at the forefront of the trend when it came to environmentally responsible gift cards. The retail giant sourced biodegradable card material from Metabolix, a bioscience and biotechnology company.

The experiment was short lived, mainly due to the high cost of the Metabolix product. A pound of the Metabolix biodegradable material ran at about $2 – double that of PVC. The high price of production caused Target to terminate the deal after a little less than a year.

Wood-based cards aren’t cheap, either. Sustainable Cards, used by Whole Foods, prices their cards at about 15 cents per card for a batch of 100,000, compared to a PVC-based manufacturer that will cost retailers 7-12 cents per card.

So in the end, retailers must choose – are they willing to shell out more for an environmentally-friendly product, and hope that consumers are drawn to it? Or do they continue issuing PVC and other plastic cards, utilizing the lower cost to maximize profits?

There were signs that the former was happening – that retailers were beginning to realize how important environmentally-friendly products were – until disaster struck in 2008.

The 2008 Financial Crisis Devastated The Green Gift Card Industry

The 2008 Financial Crisis cause a huge variety of problems for worldwide markets – but the green gift card industry was struck especially hard.

With profits and sales falling to the lowest rates in over 35 years in 2008, companies began slashing budgets and reducing costs wherever they could – including in their gift card programs.

After all, when your company is failing to turn a profit, it’s pretty much a no-brainer to ditch an environmentally-friendly gift card for one that’s only half the cost – but functionally, is exactly the same.

Today, the number of sustainably produced gift cards continues to increase – but the market share was at less than 1% in 2013. Clearly, there is still a lot of work to be done through innovation of materials to reduce costs, and for consumers to demand retailers buy into advanced, eco-friendly gift card materials.

It’s Not Just Retailers – How The Hotel Industry Uses Green, Eco-Friendly Cards

Interestingly, it’s not just retailers who benefit from green, eco-friendly cards. Hotel chains have been turning towards ecologically friendly cards to reduce waste. Almost all hotels nowadays use an electronic card to unlock doors and access other hotel facilities, rather than keys.

Sustainable Cards, as mentioned above, produces eco-friendly cards for use in the hotel industry, and they have found their profits increasing massively since their founding in 2010. According to the founder of the company, they have doubled their profits every year since their founding, and in 2013, they anticipated profits of $2-3 million.

Hotels are a natural place in which green, eco-friendly cards would be used. While their cards are still often disposed of after they’re worn out, they typically can be reused multiple times, so the slightly higher cost of acquiring environmentally friendly cards is not too much of an investment.

In fact, eco-friendly gift cards made out of wood can be especially effective in higher-end hotels they offer yet another way for the hotel to differentiate itself from the crowd, and set itself apart as a truly luxurious operation.

The Future Of Green Gift Cards May Be Digital

There’s only one thing that’s better for the environment than making a card out of a renewable, sustainable material – not making a card at all.

Green gift card are slow to be adopted by retailers – but their digital counterparts are massively exploding in popularity. Digital gift card sales are increasing, and consumer seem to like digital gift cards, as opposed to physical gift cards and the e-mail printouts that were common before smartphones and other digital devices.

According to InComm, 70% of consumers in a 2015 study agreed that they were “much more likely” to be interested in purchasing digital gift cards today than they would have been two or three years ago, and 87% would prefer to have an option when purchasing a gift card of choosing between a physical and a digital version.

The advantages of digital gift cards over physical gift cards are vast. Digital gift cards are:

  • Almost totally cost-free for retailers
  • Instantly deliverable to customers through email
  • Easy to buy – no in-store purchase required
  • Highly mobile, and can be scanned from smartphones
  • Easier for retailers to integrate with loyalty programs
  • Convenient to use both online and in-store with smart consumer account integration

Given these positive attributes for both retailers and consumers, it’s unsurprising that sales of digital gift cards are spiking. As mentioned in our intro, the gift card market is still growing, but slowly – about a 6% growth rate in 2016.

In comparison, digital gift cards are growing at an astonishing rate – with an expected annual growth rate of 200% in 2016. In 2016, digital gift cards sold for a total of $10 billion – making them a huge part of the $127 billion gift card market, and 2017 sales are estimated to reach $14 billion.

Because of the great growth rate, quick consumer adoption, and low cost of digital gift cards, it’s entirely possible that the future of sustainable gift cards is not based on high-cost, renewably-sourced materials – but on completely digital platforms.

If all gift cards became digital, that would be quite good for the environment indeed – there would be no more waste of PVC and other materials, and the environmental impact of the gift card industry would sink dramatically.

However, we’re likely still quite a ways away from fully-integrated digital gift cards. Even though a vast majority of retailers are now offering digital gift cards – 81% in 2016 – sometimes, nothing beats handing someone that physical gift card and seeing their face light up.

Starbucks – A Leader In Digital Gift Card Integration

Starbucks Gift Cards

If you’re wondering who does digital gift card integration better than anyone else, the answer is simple. Starbucks.

For over four years, Starbucks has offered a comprehensive smartphone application that allows customers to reload gift card balances right from their phone, earn rewards without bringing a rewards card into the store, and pay quickly and easily at the register with a QR code on their phone.

This top-notch digital integration has made Starbucks a prime example of digital gift cards done right – and serves as a model for other retailers who are looking at digital gift cards in an effort to decrease costs and support better environmental health.

Don’t Waste Your Digital – Or Physical Gift Cards! Sell Unwanted Cards At EJ Gift Cards!

Environmental pollution isn’t the only form of waste when it comes to gift cards. It’s estimated that, since 2008, there has been over $44 billion tied up in unused, wasted gift cards. Due to new regulations on gift card expiry dates, that number is shrinking – it’s estimated that only $1 billion out of $130 billion spent on gift cards went unused in 2015.

Still, you shouldn’t waste your unwanted gift cards by letting them sit around in your drawers collecting dust until they expire. Instead, you should sell them for cold, hard cash!

EJ Gift Cards is a leading gift card buyer, and we purchase both physical and digital gift cards, paying out cash through PayPal once the credentials on your gift card have been verified.

If you have gift cards sitting around that you won’t use – restaurants you don’t like, stores you never go to, or any other kind of gift card that you don’t need – sell it to us! We take literally hundreds of gift cards, and pay competitive rates.

Our simple, step-by-step process allows you to quickly and easily sell your cards, and if you ever have any questions, concerns, or comments about our services, you can contact our customer support team, and we’ll get you sorted out.

So don’t waste your gift cards by throwing them away – or by leaving their balances unused. Turn your useless gift cards into cash by selling them at EJ Gift Cards. Your wallet (and the environment) will thank you for it.