InComm Research Proves Digital Gift Cards Will be Popular Gifts This Holiday Season

• 71% intend to purchase at least one gift card from an online website or mobile website/app this holiday season, while 74% agree that they are likely to purchase at least one digital gift card
• 85% of respondents between 18-35 agree that they’re likely to purchase at least one digital gift card this holiday season
• Of those who intend to purchase gift cards from online websites or mobile websites/apps this holiday season, nearly 20% plan to purchase 5 or more gift cards; 73% between 2-5
• Nearly 90% of respondents between 18-35 agree that they are more interested in purchasing digital gift cards now than they were two to three years ago
• 77% of respondents between 18-35 prefer to have a digital gift card scanned from their phone rather than carry an email printout
• 53% of total respondents, and 79% of those between 18-35, are interested in storing and using gift cards on their phones
• 55% of total respondents, 79% of those between 18-35, agree that they’re interested in storing digital gift cards on their phone for self-use
• Nearly 23% of those who have purchased gift cards from online websites or mobile websites/apps purchase 5-10 cards annually

“Retailers can significantly increase sales of gift cards by enabling consumers to easily purchase both physical and digital gift cards from their desktops and mobile devices,” said Mike Fletcher, General Manager, Digital Solutions, InComm. “This research shows that digital gift cards are rising in popularity, especially with those in younger age brackets. It’s also interesting to see how many respondents are increasingly interested in storing digital cards on their phones for self-use. The key is that consumers want more gift card options, giving retailers incentive to provide an exceptional physical and digital gift card shopping experience across all channels.”

2014 Holiday Intentions

71% of respondents intend to purchase at least one gift card from an online website or mobile website/app this holiday season, while 74% agree that they are likely to purchase at least one digital gift card. About 85% of respondents between 18-35 and 75% of those between 36-55 agree that they’re likely to purchase at least one digital gift card this holiday season.

Participants were asked how many gift cards they intend to purchase from online websites or mobile websites/apps this holiday season:

• 8% are likely to buy 1
• 53% are likely to buy 2-3
• 20% are likely to buy 4-5
• 19% are likely to buy more than 5

Purchasing Physical vs. Digital Gift Cards

Of those who have bought a gift card from an online website or a mobile website/app, 41% have purchased a physical gift card, while 32% have purchased a digital gift card and 27% have purchased both. A digital gift card was defined as a card that is emailed to the recipient, and a physical gift card defined as a traditional gift card that is shipped to the recipient. When asked how many gift cards they purchase from online websites or mobile websites/apps annually, respondents answered:

• 33% purchase 1
• 40% purchase 2-4
• 17% purchase 5-7
• 6% purchase 8-10
• 6% purchase more than 10

When deciding whether to purchase a digital gift card or a physical gift card, nearly one-third state that it depends on who they’re buying the card for. In fact, 77% prefer to have the option to purchase either a physical gift card or a digital gift card when purchasing gift cards from online websites or mobile websites/apps.

Digital and Mobile on the Rise

79% agree that they’re likely to purchase at least one digital gift card in 2015, with 89% of those between 18-35 stating they are likely to purchase at least one digital gift card in 2015. Also, 80% agree that they’re more interested in purchasing digital gift cards now than they were 2-3 years ago, with numbers higher among younger respondents:

Ages 18-25: 90% agree
Ages 26-35: 88% agree
Ages 36-45: 83% agree
Ages 46-55: 83% agree
Ages 56-65: 71% agree
Over 65: 63% agree

50% of respondents agree that if they receive a digital gift card, they prefer to have the card scanned from their phone rather than carry an email printout. These numbers are higher among younger respondents:

Ages 18-25: 78% agree
Ages 26-35: 75% agree
Ages 36-45: 60% agree
Ages 46-55: 45% agree
Ages 56-65: 29% agree
Over 65: 16% agree

Further, 53% of respondents are interested in storing and using gift cards on their phones. Again, interest is higher among younger respondents:

Ages 18-25: 78% agree
Ages 26-35: 79% agree
Ages 36-45: 65% agree
Ages 46-55: 53% agree
Ages 56-65: 33% agree
Over 65: 16% agree

Also, 55% of respondents agree that they’re interested in storing digital gift cards on their phone for self-use, such as for budgeting purposes, to earn loyalty rewards, etc. Among those aged 18-35, 75% agree that they’re interested.

Gift Card Shopping Preferences

Respondents answered the reasons that they have purchased digital gift cards:

• 61% said instant delivery
• 33% said easier to send
• 27% said easier and quicker for me to purchase
• 24% said harder to lose
• 21% said are a cool gift to give
• 20% said easier to redeem
• 19% said environmentally friendly
• 15% said the recipient prefers digital gift cards

Respondents stated which features/capabilities are important to the purchasing experience when buying gift cards from online websites or mobile websites/apps:

• 72% said security
• 56% said a variety of denominations available
• 36% said the ability to personalize the message
• 38% said a variety of designs to choose from (birthday, holiday, etc.)

Gift Cards and Loyalty Programs
When asked if they participate in a loyalty program (earning points for purchase), 74% of respondents stated that they do. 54% participate in 2-3 loyalty programs, 20% in 4-5, and 19% in 1. When asked how they use their points to purchase, 64% said cash rebate, 59% said gift card, 33% for a product, 27% said airline miles, and 3% said experiences (wine tasting, concert, etc.).

When using loyalty points for a gift card, 38% of respondents prefer the option of choosing between a physical or digital gift card.

Cash and gift cards are top choices by far when it comes to the types of rewards respondents prefer to receive from an employer. Further, 54% of respondents would consider switching their utility, cable, or internet provider if they were offered a gift card incentive for switching. When asked if they were to receive a reward for making a purchase, in which format would they prefer to receive the reward, 54% answered an open-loop prepaid card, while 39% answered a gift card and 7% said mail-in rebate.

All respondents were surveyed online in October 2014.

About InComm
Leveraging deep integrations into retailers’ point-of-sale systems, InComm provides connectivity to a variety of service providers that allow consumers to conduct everyday business at more than 450,000 points of retail distribution worldwide. Whether those consumers are activating prepaid products, paying bills, enjoying real-time discounts through a membership card, purchasing digital goods in-store or adding funds to an online account, InComm is there to provide unique gift-gifting opportunities, cater to on-the-go shoppers, deliver added value through loyalty programs and serve cash-based consumers. With 186 global patents, InComm is headquartered in Atlanta with a presence in over 30 countries in North and South America, Europe and the Asia-Pacific region. Learn more at www.incomm.com or connect with us on www.twitter.com/incomm, www.facebook.com/incomm, www.linkedin.com/company/incomm or www.incomm.com/blog.

###