Why Are Gift Cards So Popular?

Whether offering a physical or a digital gift card, they all seek to serve the same purpose and have various benefits. Gift cards may seem impersonal, but overall they make one of the best gifts, especially when you don’t know what to get. What contributes to their popularity?

Gift cards are flexible since they give the recipient freedom to shop for what they want, and on the giver’s side, they reduce the stress of finding the perfect gift for a person. They are also so personal, help minimize wastage, and one can easily stay on a budget.

People give gift cards for different reasons, and their benefits outweigh their downsides. Companies also prefer gift cards rather than cash to their employees. In this article, I will discuss more and take you through the history of gift cards and how they came to be. Read on!

Why Are Gift Cards So Popular

Gift cards are my favorite form of gifts, either when I am giving or receiving. Most retailers offer gift cards, especially when it nears the festive season, either in physical or e-gift cards. Though some people consider it as impersonal or that the person is lazy to buy and wrap a gift, they remain to be so popular and have tons of benefits.

At some point, finding the appropriate gift for a loved one can be hard. Even when you get one, you can still doubt if the person will like it or not. Gift cards save one from this trouble and are one reason why they are so popular. With it, the person will purchase their ideal gift from the store they like, and at the end of the day, you can be sure that they are content with their present.

The gift one can represent their personality, and one mistake I always want to avoid is giving a present opposite of a person’s character. Also, it shows what I think of the person I am gifting, and the worst I can do is get it wrong. Nobody wants to get this wrong; hence it makes much more sense to get a gift card instead.

Unlike cash where you stash some amounts in an envelope, gift cards tend to show some effort and thoughts. They may require less effort, and people tend to think that they are impersonal, especially for the general ones. To make them more personal, try to select ones in line with their hobbies and maybe their favorite stores or restaurants. Such cards will show you have put in thoughts.

With gift cards, they help one save since you can stick to the set gift card budget. You can select a certain limit that you wish to spend on something with them, and you cannot go beyond that set limit. Gift cards are like cash in hand, but this time, you will be directing it to a specific store, and you will have to set a certain budget to use for that particular store.

For those who have no time to shop around for a good gift, gift cards are the go-to option. Typically, one needs not to leave the house since there are stores with online gift cards, allowing you to personalize the gift cards to your taste. They are also convenient in that the receiver can track the card from his or her end. Gift cards will help save you the time you can spend buying a gift and, most importantly, save you money since they are inexpensive.

Another highlight of gift cards is that most stores have excellent and discounted deals on them. Most retailers will give discounts to attract customers to the store, and most likely, the person will spend more than its value. When looking for a deal, ensure the site is legit and not make the person pay more than its value.

Another reason why gift cards are popular is that they are easy to give, and you can make them attractive to look like a perfect gift. One way to achieve this is by slipping a well-written note in there or adding some cash to spice it up. Moreover, you can be selective on the kind you are giving by ensuring that you give them one that resonates with what the person likes.

Gift cards are a preference for many in gift-giving, especially when one is clueless about what to gift a person. They make a much better gift than cash, and the recipient can see that at least there was some effort in getting what you think they will enjoy. However, as you give, ensure that it is an open-loop card that will give the person options to buy.

Who Invented Gift Cards

In the 1930s, there was the introduction of cash equivalents in the form of “gift certificates” in major stores, and only a few customers were to get them. McDonald’s first gift certificate came to life in 1970, and from here, other restaurants, retailers, and shops would come up with their gift certificates, still allowing the select customers to have them.

Though gift certificates were a good idea at the moment, the time to issue and redeem them was an issue that was quite an issue. Moreover, there was a rise in the production of fake gift certificates due to the continued use of color papers. It was easy to produce and forge the numbers on the gift certificates, of which tracking was not easy, and in most cases, the retailers were making losses from it.

The solution to fake gift certificates came to life in the mid-1990 with the introduction of gift cards. Smithsonian magazine asserts that Neiman Marcus was the first person to sell gift cards in 1994. However, Neiman did not advertise the cards, so they did not reach the consumers well, and this is where Blockbuster comes in as the first company to display the gift card to the public.

The cards by Blockbuster Entertainment had no value until they were active. Blockbuster gift cards were a new way to pay for movies and such but in a more secure, easy, and fast manner. Therefore for the card to be active, one had to pay first for it. Gift cards have since then been improving and have been having other options that one can select.

Starbucks, for instance, has been a popular gift card seller through its introduction of reloadable gift cards in 2001. These cards would allow one to use the cards more than once, which is attractive to many customers. In 2002, the sale of gift cards was at $37 billion, and this saw retailers differentiating their products, giving consumers a chance to select the store to use the gift card at and its design. According to Market Watch, gift card sale between 2007 to 2014 rose from $80 to $124

Since the first gift card production, different stores increasingly became more creative with the gift cards, contributing to their popularity. Home Depot was among the top brands to produce a very creative gift card in the form of a tape measure. Target was also innovative in its gift card through the production of toys in the form of gift cards.

Currently, gift cards are among the most popular gifts that most people prefer, and one can find them in nearly all stores. The use of e-gift cards has also been on the rise because one can order from the source to reach the person one seeks to gift. The digital gift cards come in the form of emails or texts, and the great thing about them is that they take minutes to send. But most importantly, they are an easy form of gift and saves on time.

What is the Point of Gift Cards?

It is common nowadays for stores to have gift cards, and for the consumers’ side, it is also a norm to get a gift card for their loved ones. Most stores, especially during the festive seasons they will be offering gift cards for several reasons. And on the other hand, consumers use them as a form of gift for their reasons.

Giving gift cards to retailers is a perfect way to create loyalty between the store and the firms and acquire new customers. It is easy to market gift cards for most stores since they need to place them at the front desk. For a business that allows credit cards for their goods, especially for essential goods but whose prices are high, they come in handy for such goods to sell. They usually lure people who are not in a position to shop to at least window-shop in the store, which may bring sales to the business.

Retailers also embrace gift cards since they are sure that the customers will pay full price for the product or service. According to statistics, there is a 2.5 times likelihood that customers with gift cards will pay the set price for the service or product or even more than that, unlike those making cash purchases. Such customers will not look for bargains or wait until the sales are down, which allows an increase in the businesses’ profits. Moreover, there Is a high chance that the shopper will spend more than the gift card’s actual value.

Gift cards come with the brand’s logo, which helps increase awareness about the brand since it is a form of advertising. When a person purchases the card to gift another, they make it aware to them and maybe the people around about such a brand. Though it is a form of advertising, one spends way less than other forms of advertising.

These cards also help create the seller and consumer connection, especially when businesses give them free. It may make a good impression of the brand to the customer, who may be a constant shopper at the store. Gift cards create more opportunities for the customers to engage with their products when the gift-givers act as the ambassadors.

During the holiday season, a company embracing gift cards will have its cash in advance. For a holiday destination that expects visitors at some point, they will need to plan before catering to the expenses. Money from gift cards comes early, giving them enough time to plan, attracting, and retaining more customers.

The purpose of gift cards on the consumers’ side is to make it easy for them when gifting their friends, especially when one has no idea what to get them as a gift. They are much easier to select and save time since they may choose to buy the e-gift instead. Also, gift cards make such a better gift when giving, and at least one can see some effort than stashing cash in an envelope.

With gift cards, the recipient can buy what they want, which is way better than getting a gift that they do not like or are less likely to appreciate. Also, it is considered a thoughtful gift, unlike cash gifts, where you need not think about it. Gift cards are there for people who like something more tangible, which assures the giver that no wastage will occur.

Moreover, gift cards eliminate the guilt that one may get for using cash on themselves or someone. There are instances where I have always been guilty of spending some extra money to buy something luxurious for myself maybe. But if I use a gift card instead, it feels like more of a reward even though there is some cash I will use to get it. Moreover, when someone gives me a gift card, it means that they permit me to spend the card to please myself.

According to some research by the National Retail Federation, people return about 8.8 percent of their gifts. The returning can be draining for both the seller and the consumer, which cannot be the case with gift cards. Most people tend to enjoy the gift card as it is, and returning it is nearly never an option due to the high costs one may incur.

Why Do Companies Give Gift Cards Instead of Cash?

Gift cards as an incentive in most companies have been on the rise, which is so for several reasons. Most people will prefer to give gift cards as gifts instead of cash; similarly, companies will like gift cards for their employees. One popular reason for gift cards is their ability to cater to a person’s interest, and it helps to increase the brand’s awareness which in return attracts new customers.

Most companies consider gift cards more discrete since you need not mention the amount you are about to give to the employee. Also, it is more comfortable to talk about gift cards than cash, and it is usually more acceptable to talk about gift cards than cash. Gift cards are like a tangible non-cash incentive, and you can easily brag about it or bring it up during a discussion with your colleagues.

When giving gifts, the recipient wants to feel that they got something, making gift cards a great option for organizations. Cash gifts are ok, but they do not motivate employees to work extra harder since they will take it as mere compensation of which the employee may choose to spend for their purposes. The purpose of gift cards is to show that the employee earned an incentive, and the employee will get it instantly. When the employee receives a gift card, say one that covers their vacation somewhere they will live to remember it, unlike cash to end up spending as part of their salary.

Gift cards allow for guilt-free spending since they allow a person to go for a luxury treatment in which they will not spend any money out of their pockets. Also, most companies view them as a no-cash incentive that a person may not purchase for themselves. Therefore, they allow the employee to have such an experience. For example, if the employee has meant to go on a trip somewhere, but they have no enough cash to sponsor it, the company might want to chip in and give a gift card for a certain destination to the person. They will not feel guilty going on that trip and will be motivated to continue making the company proud.

The possibility of sharing gift cards with your loved ones also makes companies prefer them to cash. At times, companies will require the participant’s family member to be present in selecting awards for the employee. Such motivates the employee and his or her goals. Moreover, the storytelling power that gift cards have cannot compare to that of cash. It is unlikely for a person to reveal what they did with their money, but with gift cards, the objective is set, and talking about it is easy.

Gift cards are one of the best gifts you can accord someone. Most times, people consider the thought you have about them rather than the actual gift you get them. Money has less power, and even though people appreciate it, a gift card is more memorable and assures one that no wastage will occur.

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