Gift Cards Market: Increased use of Gift Cards as Rewards and Incentives to boost Market growth

Gift Cards Market Overview

A gift card is a prepaid, stored-value card issued by a retailer or bank. It serves as a cash alternative for purchases within a specific store or affiliated businesses. Employers or organizations offer gift cards as rewards or gifts, and retailers and marketers sometimes distribute them as part of promotional strategies to attract customers to their stores or encourage return visits. These cards are occasionally referred as cash cards. Stellar Market Research published a report that analyzes Gift Cards Market trends to predict the market's growth. The report provides detailed insights into the five major elements (size, share, scope, growth, and potential of the industry). It offers valuable information to help businesses identify opportunities and potential risks within the market. This detailed report ensures an in-depth analysis of the Gift Cards Market.

 

The gift cards market is experiencing significant growth driven by various factors, including the increasing demand for digital gifting solutions, the rising preference for experiences over material gifts, and the adoption of gift cards as incentives and rewards. With the convenience of purchasing online or in-store, gift cards provide customers with a simple and practical way to buy presents for friends, family, and coworkers. The industry faces challenges such as limited acceptance at specific retailers or brands and concerns regarding security issues associated with their use. Despite these barriers, ongoing advancements in mobile technology are driving innovation within the market, offering consumers a wide range of options for purchasing and using gift cards. Businesses are increasingly leveraging gift cards as a revenue-generating tool, capitalizing on technological developments to enhance their offerings. Features like tracking capabilities, online purchasing, and the option to donate unused balances contribute to making gift cards more appealing to consumers, which significantly boosts Gift Cards Market growth.

 

Gift Cards Market Methodology

Stellar Market Research recently released a report analyzing trends in the Gift Cards Market to predict its growth. The report delves into five key aspects: size, share, scope, growth, and potential of the industry, providing valuable insights for businesses to identify opportunities and risks. It offers a thorough examination of the subject matter, covering market overview, segmentation, current and future growth analysis, competitive landscape, and more.

 

The report's research objective is to provide an in-depth analysis of the Gift Cards market by Card Types, End User, and region. It furnishes comprehensive data on factors influencing the market and evaluates competition through mergers, expansions, product launches, and technological advancements. Key players are highlighted for their role in driving innovation in diagnostics technology, emphasizing the need for targeted strategies to meet changing consumer demands. Using quantitative research methods, the report presents statistical data on the effectiveness of Gift Cards and its impact on Gift Cards market trends. Competitive intelligence analysis helps in understanding market dynamics, competitor strategies, and customer perceptions, enabling market players to gain a competitive edge in the global Gift Cards Market.

 

 

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Gift Cards Market Dynamics 

Increase in demand for digital gifting options among users to boost Gift Cards market growth

 

The gift cards market is driven by the increasing demand for digital gifting options, driven by customers seeking convenient ways to purchase gifts for friends, family, and colleagues online or in stores. The market is influenced by the growing use of gift cards as incentives and rewards, along with a shift in consumer preferences towards experiences over material goods. The limited acceptance of gift cards, often restricted to specific retailers or brands, poses a significant barrier to Gift Cards industry growth, as security concerns associated with their use.

 

With the rapid advancement of mobile technology, gift cards have become more innovative, offering enthusiasts and smartphone users a range of convenient options. Contemporary technology and marketing strategies allow for seamless integration of gift cards into mobile platforms, such as the popular Gyft app available on iPhone and Android. This convenience and flexibility are expected to drive Gift Cards market development as smartphone usage continues to grow.

 

Businesses increasingly rely on gift cards as a revenue-generating tool, leveraging ongoing technological advancements to enhance their offerings. Features such as tracking capabilities, online purchasing, expiration date checks, and the option to donate unused balances contribute to making gift cards more appealing to consumers. These enhancements, focused on improving the customer experience, contribute to the overall growth of the gift cards market. The popularity of gift cards has surged alongside the rise of digital and mobile technologies, offering consumers easy access to purchase and use them both online and in stores. The availability of unique designs and customizable options adds a personal touch to gift-giving. Digital gift cards offer several advantages over traditional physical cards, further bolstering Gift Cards market revenue.

 

Sustainability Initiatives and Eco-Friendly Options

 

Digital gift girls eliminate the need for plastics card production and physical distribution reducing the environmental impact. These eco-friendly options align with consumer increasing environmental contributes to sustainable gifting practices. While gift cards started out as an extension of gift certificates for one retailer there are now plenty of multi brands options. Multi-brand gift cards are not only available more, they’re also becoming more popular, according to the latest trends research, which is expected to boost the Gift Cards Market growth. In BHN’s 2022 post-holiday survey, multi-brand gift cards moved up in preference, purchased by 33% of respondents, versus 27% in 2021.

 

43% of those polled see multi-brand gift cards as thoughtful because they pick where they want to spend them. As the value of the gift card increases, recipients are more likely to prefer the flexibility of multi-brand options or prepaid cards such as Mastercard and Visa.

 

Increased use of Gift Cards as Rewards and Incentives

 

Gift cards are commonly used as rewards and incentives in loyalty programs, employee recognition programs, and as incentives for customers who make a purchase or complete a survey. They allow recipients to choose their own reward and make purchases at the retailer of their choice. This enhances the perceived value of the reward, as recipients choose something that is meaningful and relevant to them.

 

Gift cards are easily customized and branded with a company logo and message, making them a powerful marketing tool. Another major driver of using gift cards as rewards and incentives is that they are a cost-effective alternative to other types of incentives, such as cash or merchandise, which significantly boosts the Gift Cards Market growth. Companies control their costs by limiting the amount on the card, while still providing the recipient with a valuable reward with gift cards. Gift cards are powerful tool for companies looking to improve customer loyalty, increase employee engagement, and drive customer behavior.

 

Consumer Preference for Experiences over Tangible Gifts

 

In recent years, there has been a shift in consumer preference toward experiences, such as dining or entertainment, and gift cards is used to purchase these experiences. People look for unique and memorable experiences that they share with friends and family, rather than material possessions that eventually become obsolete. This shift in consumer behaviour is attributed to the rise of social media, which has made it easier for people to share their experiences with others.

 

In addition, people are more aware of the negative impact that material possessions have on the environment, which further fuels their preference for experiences. Therefore, gift cards are a wonderful way to give someone the flexibility to choose their own experience, whether it is a meal at a restaurant, a concert, or a spa day. They allow the recipient to choose something that is tailored to their interests and preferences, making them a highly appreciated gift, which boost the Gift Cards Market growth. Thus, the trend toward experiences over tangible gifts highlights the growth in importance of creating and sharing meaningful experiences.

 

Limited Acceptance of Gift Cards to restraints Gift Cards Market growth

 

Gift cards are often only accepted by the issuing retailer or brand, limiting their versatility as a gift. This is deterrent for consumers who want more flexibility in how they spend their gift. Gift cards issued by a specific retailer or brand are often only accepted at that retailer's stores or online shop and cannot be used at other businesses. This means that the recipient of the gift card are limited in how they use it and are not be able to purchase what they really want or need. Many consumers opt for generic gift cards that are used at multiple merchants, such as Visa or Mastercard gift cards to combat this issue.

 

These cards offer more flexibility and are accepted at a wider range of businesses, making them a more versatile gift option. Many gift cards come with expiration dates, which means that if the recipient does not use the card within a certain timeframe, the value on the card is lost. This is seen as a drawback by consumers who prefer gifts that do not have a limited lifespan. Therefore, limited acceptance of gift cards is a major restraining factor for the gift cards market growth.

 

Gift Cards Market Segment Analysis

Based on Card Type, the market is segmented into Closed-loop Card, and Open-loop Card. Closed-loop Card segment dominated the market in 2023 and is expected to hold the largest Gift Cards Market share over the forecast period. In the gift cards market, closed-loop cards represent a segment characterized by cards that are issued by a specific retailer, restaurant, or business and are used for purchases within that particular establishment or its affiliated locations. Unlike open-loop cards, which are typically issued by financial institutions and is used at various merchants, closed-loop cards have limited usability and are often designed for specific brands or retailers.

 

 

Closed-loop gift cards function similarly to prepaid cards, where the cardholder loads a specific amount of money onto the card, and this balance is spent on purchases at the issuing retailer or affiliated businesses. These cards are commonly used as gifts, incentives, rewards, or promotional tools by businesses to encourage customer loyalty, drive sales, and attract new customers.

 

Gift Cards Market Regional Insight

North America dominated the market in 2023 and is expected to hold the largest Gift Cards Market share over the forecast period

 

Gift-giving plays a central role in various occasions and celebrations, including holidays like Christmas, Thanksgiving, and birthdays, as well as personal milestones such as graduations, weddings, and anniversaries. This cultural tradition fosters a strong demand for gifts across a diverse range of demographics and occasions, driving the overall growth of the North America Gift Cards market. North America's robust economy and high consumer spending power contribute to the buoyancy of the gift market. With relatively high disposable incomes and a culture of consumerism, individuals in North America are willing to spend on gifts for their loved ones, friends, and colleagues. This economic stability provides a conducive environment for retailers, manufacturers, and service providers to capitalize on the demand for gifts and drive sales growth in the market.

 

 

 

Government initiatives promoting the adoption of digital payments as alternatives to cash in numerous industries, including hospitality, banking, corporate institutions, and retail. Technological advances in product offerings, the growing adoption of digital gift cards in the United States and Canada, and an increase in the promotion of gift card programs via omnichannel all contribute to the growth of the gift cards market in the region. In addition, North America has one of the worlds most advanced and well-established payment infrastructures, which is anticipated to generate the profit potential for prepaid cards as a critical alternative to cash over the forecast period.

 

Gift Cards Market Scope
Market Size in 2023	USD 980.52 Bn
Market Size in 2030	USD 151.13 Bn.
CAGR (2024-2030)	17.4 %
Historic Data	2018-2022
Base Year	2023
Forecast Period	2024-2030
Segments	By Card Type Closed-loop Card Open-loop Card
	By End User Retail Establishment Corporate Institutions
Regional Scope	North America- United States, Canada, and Mexico Europe – UK, France, Germany, Italy, Spain, Sweden, Austria, and Rest of Europe Asia Pacific – China, India, Japan, South Korea, Australia, ASEAN, Rest of APAC Middle East and Africa - South Africa, GCC, Egypt, Nigeria, Rest of the Middle East and Africa South America – Brazil, Argentina, Rest of South America

 

Gift Cards key players Include:

North America:

1. Blackhawk Network Holdings, Inc - Pleasanton, California, USA
2. InComm - Atlanta, Georgia, USA
3. National Gift Card Corp. - Crystal Lake, Illinois, USA
4. SVM Global - Des Plaines, Illinois, USA
5. Tango Card - Seattle, Washington, USA
6. Ticket - Mexico City, Mexico
7. Edenred Mexico - Mexico City, Mexico

Europe:

8. WeGift - London, United Kingdom
9. Aspire Global - Sliema, Malta
10. PFS (Prepaid Financial Services) - London, United Kingdom

Asia-Pacific:

11. Qwikcilver Solutions Pvt. Ltd. - Bangalore, India
12. Sodexo Benefits and Rewards Services - Gurgaon, India
13. Gift Card Spread - Mumbai, India
14. Smartgift Pty Ltd - Sydney, Australia
15. Qwikgifts Pty Ltd - Melbourne, Australia