Our Predictions for Gift Cards in 2023
As customer behaviour, technology, and the global economy evolve each year, so does how businesses secure gift card customers. The traditional models of simply hoping that a B2B presence will be gained through a solid B2C programme or having a card with a whole host of restrictions and caveats are no longer enough. It’s difficult to predict precisely what trends we’ll see with gift cards in 2023; however, some potential trends could emerge.
As technology advances, we may see more options for personalized gift cards. This could include the ability to customize the card’s design or choose from various gift card themes. As well as the card and delivery options being personalized – companies must look towards providing more personalized experiences catering to individual needs to stay competitive. Who knows what this could look like – but we know that reminders have been used in tech and apps for great success. We also know that customers are attracted to loyalty and incentive schemes – although, ultimately, the effectiveness of incentives in driving gift card sales will depend on various factors, including the perceived value of the incentive and how well it aligns with the interests and needs of the customer.
2. Increased Security
With data breaches becoming increasingly common, retailers will look for ways to make their gift cards more secure. According to a report by Europol, the EU’s law enforcement agency, gift card fraud is a growing problem in the region. In 2019, Europol reported that gift card fraud accounted for over a third of all payment fraud losses in the EU.
Gift card fraud can take various forms, including the theft and resale of physical gift cards, the use of stolen or compromised gift card information to make unauthorised purchases, and the creation of fake gift cards.
We may see things like PINs or two-factor authentication become more commonplace. These are easily accessible and achievable for most retailers and programme managers – but the sky is the limit for security! Some potential measures that we might see in the future include:
Encryption: Retailers may use encryption to protect the data on gift cards from being accessed by unauthorised parties.
Secure Element Technology: Some retailers may use secure element technology, a secure hardware component that stores sensitive data. This technology could protect gift card information from being accessed by unauthorised parties.
Tokenisation: Tokenisation is a security technique that replaces sensitive data with a unique, non-sensitive value called a token. This can help to protect gift card information from being accessed by unauthorised parties.
Biometric Authentication: Retailers may implement biometric authentication, such as fingerprints or facial recognition, to verify the person’s identity using a gift card. This could prevent unauthorised use of the card.
Multi-Factor Authentication: Retailers may also use multi-factor authentication, which requires users to provide multiple pieces of evidence to verify their identity. This could include passwords, a security token, or a biometric measurement.
Overall, we’ll see a combination of these and other security measures being used to protect gift cards in the future.
3. More Variety
While gift cards have traditionally been offered for physical goods, we’re also seeing an increase in options for experiences and digital products. Some potential newcomers to the gift card space could include:
Subscription services: Gift cards for subscription services, such as streaming platforms or monthly box delivery services, could become more popular. Magazines have already thrived in the space – but this is an open market. These gift cards could allow recipients to access a service for a specified period.
Digital content: Gift cards for digital products, such as ebooks, digital music, or video games, could become more common. The main players are already offering their programmes, but there could be outliers who break into the market in 2023. These gift cards allow recipients to purchase and download digital content directly to their devices.
Overall, we’ll see a wider variety of products and services being offered on gift cards in the future as retailers look for ways to appeal to a diverse range of customers and meet changing consumer preferences.
4. Better cash-back offers
Gift cards could offer better cash back or points to compete with loyalty programs and other incentives offered by retailers.
There are several ways that gift card issuers could offer cash back or points on certain types of gift card purchases. For example, they could offer a percentage of the purchase price back as a reward for using the gift card or a certain number of points for each dollar spent using the gift card. These offers could be limited to certain types of gift cards or certain retailers or be available on all gift cards.
It’s worth noting that the effectiveness of cash back or points offers in driving gift card sales will depend on various factors, such as the perceived value of the offer and how well it aligns with the interests and needs of the customer. As a result, retailers will need to carefully consider the types of offers they make and how they are structured to maximize their effectiveness.