Written by: Mrudul

Digital vs. Physical Gift Cards

In this article, we will discuss the differences between digital and physical gift cards, as well as compare their pros and cons.

Retailers love giving gift cards to their customers, and rightly so. From increasing the average order value to improving brand awareness, it does a lot. In this article, we look at e-gift cards vs. physical gift cards, their differences, benefits, and so on. Sustainable gifting choices have become one of the key ingredients in gifting, of late. Such eco-friendly gift card solutions push for the usage of organic materials and those that are ethically sourced.

The future of gift card technology looks bright since digital gift card adoption is anticipated to reach 1,352.45 Billion by 2032. There are two types of gift cards– physical and digital. Both have their own benefits and features. Physical and digital gift cards can be used online and at the store as well. Physical gift cards are usually made out of plastic while digital ones don’t have a form. It is usually sent as an email and the encrypted code is used to make purchases.

How Gift Card Works

Gift cards are pre-paid cards that can be used in restaurants, retail stores, petrol stations, and other businesses. They are a popular gift option since they let the recipient pick what they want and may be used at many different businesses.

Gift cards come in two main different types: Open-loop and Closed-loop. Gift cards that are open-loop, like Visa and Mastercard gift cards, can be used anywhere that takes those credit cards. Closed-loop gift cards that are closed-loop, like those from Starbucks or Target, are only redeemable at a single retailer or a group of retailers. Simply show the gift card to the cashier at the register to use it. The card will be swiped or the card number will be manually entered by the cashier. The gift card’s remaining balance will be reduced by the cost of the purchase.

You can use gift cards online as well. You must input the gift card number and expiration date at checkout in order to accomplish this.

Though certain states have legislation requiring gift cards to expire after a specific amount of time, gift cards often have no validity date. It’s a good idea to review the terms and conditions of the gift card to find out whether there are any fees or expiration dates attached.

Interesting Physical and Digital Gift Card Statistics:

  • The digital gift card adoption rate will increase by 23% by 2025
  • The estimated annual carbon footprint of physical gift cards(in 2013) was 585,300 tons. It is more than all the daily air flights in Europe combined
  • 16.5% is the total amount of retail sales returns. Digital gift cards reduce the return rate since the recipients get to buy gifts of their choice
  • A Neilsen study says that 66% of consumers are happy to pay more for sustainable goods
  • 75% of consumers between the ages 18 and 44 received gift cards during the 2022 holiday season

Physical vs. Digital Gift Cards:

Let’s look at the main differences between physical and digital gift cards while comparing them with its unique features and benefits.

Convenience of Purchasing:

When a customer is looking for a particular gift card, they must go to the retailer directly. Imagine taking the metro, walking a few hundred meters, and getting into the store to get a gift card. With digital gift cards, you can complete the purchase with the click of a few buttons. If the store doesn’t have the gift card in stock, you are in for one more similar journey.

Digital gift cards have a clear advantage when it comes to the convenience of purchasing. You can purchase the gift cards from any store, sitting within the comforts of your home.

Global Delivery:

It is impossible to purchase physical gift cards at a store in a different state or country. No one will make the effort to do so, and it is only futile. On the other hand, digital gift cards are usually sent to the recipient’s email, or it might be in the form of an SMS. If you are gifting to someone who doesn’t live nearby, physical gift cards are a hassle to get your hands on.

The only delivery issue we can think of when it comes to digital gift cards is that the email with it can be stopped by the email security filters, making it easy to miss, not that a phone call or a message will not solve it. Also, do remember that digital gift cards promise instant delivery. Physical gift cards will take a few days to reach the recipient’s address.

Gift-Giving Experience:

In terms of the gift-giving experience, physical gift cards rank above. Why? Because it feels like an actual experience when you hand over the physical card. On the other hand, a digital gift card is usually sent as an email or an SMS, and it does feel impersonal. You will find that the recipient is excited to get their hands on something, while it is the exact opposite when getting a digital gift card.

With creative packaging, the recipient will be able to go through the exact process of gift receiving, and you can also derive the same pleasure you get when a loved one opens the gift you give. Physical gift cards do feel like a genuine gift, while the same cannot be said about digital gift cards, even though the outcome in terms of the value in it is the same.

Great for Last-Minute Gifts:

Mere mortals like us tend to forget the special days of our loved ones. This is where buying and sending physical gift cards is almost impossible, certainly not on D-day. Digital cards can be literally given at the last minute.

More than 33% of last-minute shoppers choose where they buy from based on how fast they can get it. This is one more area where digital gift cards score much higher. This statistic is a telling statement about the convenience that digital cards offer to customers. You can not only buy it at the last minute but it can also be given to the recipient as soon as the purchase is made. Security:

Physical gift cards don’t really have huge security issues, except for the fact that they can be stolen and used by thieves. Digital gift cards, on the other hand, are vulnerable to fraud. Since personal information is given to obtain digital gift cards, identity theft is an issue. Your payment information can be up for grabs as well, using which they will use or resell them. By implementing account security protocols, following best practices, and using secure gift card software like 99minds, gift card fraud can be less of an issue.

Zero Worry About Misplacement:

The problem with a physical gift card is that it can be easily misplaced. The wonderful thing about digital gift cards is that it is secure in your email or SMS inbox. Unless someone steals your smartphone or gains access to your laptop, you don’t have to worry about losing the amount in the gift card.

Customization and Design Options:

Digital gift cards offer extensive customization and design options which lets buyers personalize to their liking. From using pre-made gift card design templates to adding logos, personalized messages, and images, a lot can be done. Custom designs are not possible for physical gift cards since they are made in bulk. For individuals or businesses looking to buy gift cards, the digital ones offer great flexibility and room for creativity.

Sustainability:

Reducing plastic waste with e-gift cards or digital cards is entirely possible. There is no way the same can be said about physical gift cards. Not only is it not sustainable, it increases the carbon footprint as it needs to be transported to the recipient’s address as well. While physical gift cards aren’t extremely harmful to the environment, why continue using them when there is a better alternative? As mentioned earlier, the biggest advantage of physical gift cards is that they give a genuine feeling of getting a gift. If one were to take environmental considerations for gift cards, digital gift cards benefits reign supreme.

Why are Digital Gift Cards Better Than Physical Gift Cards:

Green gifting trends are on the rise. According to a SustainBrands survey, 58% of consumers are gravitating toward brands that champion or support sustainability. Digital gift cards are certainly sustainable, easy to use, convenient for both customer and brand and offer instant delivery. Recycling plastic gift cards is a possibility to ensure that they are used for a long time, but most consumers tend to throw them off after the first usage.

  • There are no shipping or packaging costs, unlike physical gift cards
  • You don’t have to double-check postal addresses. It is as easy as sending an email
  • Provides instant gratification since digital gift card recipients don’t have to wait for postal delivery
  • Your selection of rewards becomes more flexible when you offer digital gift cards
  • You can even automate the delivery of gift cards to give immediately recognize efforts of survey takers, vendors, prospects, or employees
  • Green gift card options with digital changes how customers see your brand

Benefits of eco-friendly gift cards:

At least 10 billion plastic gift cards are produced annually, according to the International Card Manufacturers Association. Digital gift cards can drastically reduce this number and result in sustainable gift card options. This is why you should offer electronic gift cards for eco-conscious consumers.

  • It presents green gift card choices for consumers
  • The plastic gift card environmental impact is drastically reduced
  • eCommerce businesses demonstrate their commitment to the environment
  • While gift cards show your love to the recipient, digital ones don’t throw any strain on the environment

Wrapping Up:

In wrapping up, gift card technology is changing to meet the constantly shifting demands of consumers. The decision between physical and digital gift cards becomes increasingly complex as sustainability takes traction.

For customers who value sentimental appeal, physical gift cards provide a real, packaged gift. However ease of use and environmental impact tip the scales in favor of digital gift cards. Statistics show that digital solutions are becoming more and more popular, which suggests that they may eventually dominate the gifting market.

Digital gift cards offer unparalleled ease in terms of worldwide shipping, last-minute gifting, and personalization, in addition to being in line with green gifting trends. Offering a smooth and environmentally responsible gift-giving experience, they provide instant digital delivery and customizable design possibilities.

To solve the issue of plastic waste, digital gift cards offer significant environmental advantages. Businesses and consumers may promote a greener, more ecologically conscious gift culture by lowering their dependency on physical commodities.

To sum up, the choice between physical and digital gift cards is based on personal preferences, but the clear trend towards sustainability points to a promising and environmentally responsible future for digital solutions. Platforms like 99minds, which provide safe gift card solutions and support an enjoyable and sustainable gift-giving experience, make navigating this environment easier.

FAQs -

  • Q. Are gift cards only suitable for retail businesses?
  • Ans. No, gift cards can be customized for various industries, including hospitality, services, and online platforms.
  • Q. How can businesses prevent fraud in gift card transactions?
  • Ans. Implementing secure measures, such as unique codes and encryption, helps prevent fraud.
  • Q. What are some eco-friendly gift card options?
  • Ans. Businesses can opt for recycled materials or digital-only options to reduce their environmental impact.
  • Q. Can gift cards be used internationally?
  • Ans. Many gift cards are designed to have global reach, but it's essential to check the terms and conditions for each.
  • Q. What trends can we expect in the future of gift cards?
  • Ans. Future trends include technological advancements like augmented reality integration and blockchain security measures.