Misconceptions Around Gift Cards: Debunking Common Myths
As experts in gift cards, we speak to retailers of all sizes who are keen to set up a gift card programme – and when we start fact finding we often find there can be common misunderstandings about the value and versatility of gift cards.
We wanted to tackle the most common ones head-on. (Did you believe any of these?!)
Misconception 1: Gift cards are picked for presents
Think that gift card peaks will be all around the main occasions, such as Christmas, Easter and Black Friday? That’s just the start of it! According to stats from the GCVA, there is a huge self-gifting market.
“Many are using gift cards as an innovative way to lessen the impact of the cost-of-living crisis, for example, to manage overall spending on presents and reduce the extra costs associated with physical gifting.”
Git cards are acting just like a banking tool, another way to safely store money and access it in a new way. Gift cards can be given to students off to university, to collect for colleagues leaving gifts, or as promises for a future day out, meal or purchase. This was proven in the stats
The leisure industry has seen exponential growth and people are continuing to prioritise socialising and experiences as we move out of the pandemic. “Whilst retail is holding steady, in-store B2C sales have increased, showing that people are returning to the shops and footfall is rising. The multi-channel element of gift cards clearly remains crucial as digital and in-store spending increases. Once again, the gift card industry is providing a much-needed solution to consumer and business’ needs.”
Misconception 2: Gift Cards are an impulse purchase
You might think that gift cards are picked up at the till point, and while these make a huge proportion of sales, there is actually another huge market- the B2B space.
While gift cards are primarily targeted towards individual consumers and limited to use at the point of purchase, the gift card market extends far beyond individual consumers. There is a thriving business-to-business (B2B) market for gift cards, allowing companies to leverage them for various purposes. Businesses often utilize gift cards as rewards or incentives for employees, clients, or partners. Gift cards can be offered as bonuses, performance incentives, or holiday gifts, fostering employee engagement and loyalty. They provide a flexible and universally appealing option, allowing recipients to choose something they genuinely desire. Additionally, gift cards serve as excellent corporate gifting solutions, enabling businesses to express gratitude and strengthen professional relationships.
B2B sales (that had rocketed during the pandemic) and a rise in B2C – and this is another trend that has continued this period. B2B sales fell -11.8% on a like-for-like basis, while B2C rose by 44.7%. However, it is still the B2B segment that dominates the market, at 67.4% of all sales.
Therefore, the scope of gift cards extends beyond individual consumers, encompassing a substantial B2B and employee reward market. So now you know!
Misconception 3: Gift cards are plastic
When picturing gift cards, many people imagine physical plastic cards that need to be presented at the point of sale or gifted as a physical thing in a card. However, the gift card landscape has undergone significant digital transformation. While plastic cards still exist, the reality is that digital gift cards have gained immense popularity. Digital gift cards, also known as e-gift cards or virtual gift cards, offer numerous advantages. They can be purchased online and instantly delivered via email or text message, making them a convenient last-minute gifting option. Digital gift cards also eliminate the need for physical storage or worries about loss or theft. Recipients can easily access and redeem them from their smartphones or other devices, enhancing convenience and accessibility. Furthermore, digital gift cards allow for customization and personalization, just like their physical counterparts. In an increasingly digital world, digital gift cards have become the go-to choice for many givers and recipients due to their flexibility, ease of use, and instant delivery. The transition from physical to digital gift cards offers enhanced convenience and accessibility for both givers and recipients.
Digital has once again continued on its upward trajectory, rising 8.5% on a rolling year basis.
According to the latest stats:
“The step up in digital gift card products seen during Covid-19 remains “locked in”, and the like-for-like growth of 22.7% in the first half of 2022 is particularly pleasing when set against the backdrop of the lockdown seen in the previous year. Digital products look intent to become the dominant form in the gift card and voucher market over the next year.” – GCVA
Getting started with Gift Cards:
At RLC, we understand the immense potential of gift cards and the challenges that come with implementing successful solutions. That’s why we’re here to guide you every step of the way.
With our years of experience and industry knowledge, we offer expert advice and hands-on support to help you navigate the complexities of gift card strategies. We start by understanding your brand’s objectives and then work with you to define the right solution, from design and technology to distribution and sales.
Our team becomes an extension of yours, providing operational support to ensure your gift card solution aligns with your overall goals. We know the importance of technology in gift card success and can help you overcome any obstacles posed by outdated systems. From white-label platforms to processing and API distribution, we have the expertise to manage all necessary tech touchpoints.
But it doesn’t stop there. The network effect is crucial in unlocking the full potential of gift cards. Working together, we’ll tap into our extensive European network of online and offline third-party channels to connect your gift cards with the right markets and drive the commercial results you desire.
So why wait? It’s time to explore the power of gift cards and the loyalty and connection they can cultivate with your customers. Book a call with our gift card consultants today and discover how RLC can help you achieve your commercial goals. Let us be your guide to gift card success.