MORGANTOWN, W.Va. – Most gift givers likely won’t choose a digital gift card over a physical gift card, even though many recipients would prefer the digital version.
That’s the key finding from new research by gifting expert Julian Givi, an assistant professor of marketing at West Virginia University’s Chambers College of Business and Economics. With Farnoush Reshadi and Gopal Das, Givi conducted five studies on givers’ and recipients’ reactions to scenarios involving digital and physical gift cards, analyzing the results in a paper forthcoming in Psychology and Marketing.
Givi said, “These studies looked at the psychology involved in giving and receiving gift cards. Across the board, they showed that givers are less likely to choose digital – as opposed to physical – gift cards than recipients are to prefer to receive them. This asymmetry occurs partly because givers overestimate the extent to which recipients see digital gift cards as violating the social norms of gift-giving.
“For example, in our pilot study, we asked 96 participants whether it’s more socially normative for a giver to give a physical or digital gift card,” he explained. “The vast majority of participants – 94.8% – selected the physical gift card.
“Givers may worry that digital gift cards won’t be seen as thoughtful. Whereas physical gift cards require a giver to go to a store and purchase the gift card, digital gift cards require only a minimal amount of time and effort, as the giver can quickly obtain one online. And a digital gift card is more likely to imply that the giver waited until the last minute to purchase a gift. This is all inconsistent with what we think about when it comes to gift-giving norms.”
Givi added that “physical gift cards may also provide givers with a greater sense of psychological ownership relative to digital gift cards, since physical gift cards are possessed by the giver for a period of time before the gift exchange.”
However, while givers often feel that “physical gift cards are superior in terms of desirability,” recipients are likely to see digital gift cards as “superior in terms of feasibility,” Givi said. “They’re easier to use and harder to lose.”
Indeed, his data demonstrate that when givers consider how they themselves would feel about receiving a digital gift card as a present, they’re more likely to give a digital gift card to someone else.
One study that moved the needle on givers’ openness to considering digital gift cards involved participants imagining giving a digital gift card as a gift for a birthday that was identified as happening during “National Digital Gifting Month.” The researchers invented that event as an analogue to Cyber Monday, but he said the results showed that “givers were more likely to opt for digital gift cards when there was an occasion that altered their perceptions of gifting norms.”
That discovery offers retailers options for pushing digital gift card sales through occasion-based promotions, and Givi said he’d advise marketers “to promote their digital gift cards in ways that reduce givers’ concerns about norm violations – for example, by indicating that digital gift cards are becoming more popular and thus more in line with gifting conventions.”
Despite giver anxieties, digital gift cards are increasing in popularity – the global market grew approximately 15% from 2015 to 2020, when it reached $258 billion. With similar growth expected over the next decade, the digital gift card market is projected to reach more than a trillion dollars by 2030.
Still, Givi emphasized that “gift-giving is a continuously evolving process, and digital gift cards are still a relatively new invention. Physical gift certificates were in circulation for nearly a century before they were largely replaced by physical gift cards in the 1990s. Then digital gift cards came into play fairly recently. Consumers have been gifting physical gift cards for much longer than digital gift cards and are far more used to them.”
Givi’s gift card studies fall into the “how to give” field of gifting research, which investigates how givers wrap, message, order and time their gifts, for instance. When it comes to both how to give and what to give, he consistently finds givers are more sensitive to gift-giving norms than recipients are.
“Givers worry about violating norms by giving a late gift or giving the same gift twice, while many recipients won’t really mind getting a gift after their birthday or receiving the same basket of goodies two years in a row,” he said.
“Just as in those situations, while there may be a widely accepted social norm prescribing physical gift cards over digital ones, givers pay more attention to this norm than recipients do.”
Citation: Gifting digital versus physical gift cards: How and why givers and recipients have different preferences for a gift card's mode of delivery
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MEDIA CONTACT: Micaela Morrissette
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Retailers love giving gift cards to their customers, and rightly so. From increasing the average order value to improving brand awareness, it does a lot. In this article, we look at e-gift cards vs. physical gift cards, their differences, benefits, and so on. Sustainable gifting choices have become one of the key ingredients in gifting, of late. Such eco-friendly gift card solutions push for the usage of organic materials and those that are ethically sourced.
The future of gift card technology looks bright since digital gift card adoption is anticipated to reach USD 1.2 trillion by 2032. There are two types of gift cards– physical and digital. Both have their own benefits and features. Physical and digital gift cards can be used online and at the store as well. Physical gift cards are usually made out of plastic while digital ones don’t have a form. It is usually sent as an email and the encrypted code is used to make purchases.
Interesting Physical and Digital Gift Card Statistics:
The digital gift card adoption rate will
increase by 23%
by 2025
The estimated annual carbon footprint of physical gift cards(in 2013) was
585,300 tons
. It is more than all the daily air flights in Europe combined
16.5% is the total amount of retail sales returns. Digital gift cards reduce the return rate since the recipients get to buy gifts of their choice
A Neilsen study says that
66% of consumers
are happy to pay more for sustainable goods
75% of consumers
between the ages 18 and 44 received gift cards during the 2022 holiday season
Physical vs. Digital Gift Cards
:
Let’s look at the main differences between physical and digital gift cards while comparing them with its unique features and benefits.
When a customer is looking for a particular gift card, they must go to the retailer directly. Imagine taking the metro, walking a few hundred meters, and getting into the store to get a gift card. With digital gift cards, you can complete the purchase with the click of a few buttons. If the store doesn’t have the gift card in stock, you are in for one more similar journey.
Digital gift cards have a clear advantage when it comes to the convenience of purchasing. You can purchase the gift cards from any store, sitting within the comforts of your home.
It is impossible to purchase physical gift cards at a store in a different state or country. No one will make the effort to do so, and it is only futile. On the other hand, digital gift cards are usually sent to the recipient’s email, or it might be in the form of an SMS. If you are gifting to someone who doesn’t live nearby, physical gift cards are a hassle to get your hands on.
The only delivery issue we can think of when it comes to digital gift cards is that the email with it can be stopped by the email security filters, making it easy to miss, not that a phone call or a message will not solve it. Also, do remember that digital gift cards promise instant delivery. Physical gift cards will take a few days to reach the recipient’s address.
In terms of the gift-giving experience, physical gift cards rank above. Why? Because it feels like an actual experience when you hand over the physical card. On the other hand, a digital gift card is usually sent as an email or an SMS, and it does feel impersonal. You will find that the recipient is excited to get their hands on something, while it is the exact opposite when getting a digital gift card.
With creative packaging, the recipient will be able to go through the exact process of gift receiving, and you can also derive the same pleasure you get when a loved one opens the gift you give. Physical gift cards do feel like a genuine gift, while the same cannot be said about digital gift cards, even though the outcome in terms of the value in it is the same.
Mere mortals like us tend to forget the special days of our loved ones. This is where buying and sending physical gift cards is almost impossible, certainly not on D-day. Digital cards can be literally given at the last minute.
More than 33% of last-minute shoppers choose where they buy from based on how fast they can get it. This is one more area where digital gift cards score much higher. This statistic is a telling statement about the convenience that digital cards offer to customers. You can not only buy it at the last minute but it can also be given to the recipient as soon as the purchase is made.
Physical gift cards don’t really have huge security issues, except for the fact that they can be stolen and used by thieves. Digital gift cards, on the other hand, are vulnerable to fraud. Since personal information is given to obtain digital gift cards, identity theft is an issue. Your payment information can be up for grabs as well, using which they will use or resell them. By implementing account security protocols, following best practices, and using secure gift card software like 99minds, gift card fraud can be less of an issue.
The problem with a physical gift card is that it can be easily misplaced. The wonderful thing about digital gift cards is that it is secure in your email or SMS inbox. Unless someone steals your smartphone or gains access to your laptop, you don’t have to worry about losing the amount in the gift card.
Digital gift cards offer extensive customization and design options which lets buyers personalize to their liking. From using pre-made gift card design templates to adding logos, personalized messages, and images, a lot can be done. Custom designs are not possible for physical gift cards since they are made in bulk. For individuals or businesses looking to buy gift cards, the digital ones offer great flexibility and room for creativity.
Reducing plastic waste with e-gift cards or digital cards is entirely possible. There is no way the same can be said about physical gift cards. Not only is it not sustainable, it increases the carbon footprint as it needs to be transported to the recipient’s address as well. While physical gift cards aren’t extremely harmful to the environment, why continue using them when there is a better alternative? As mentioned earlier, the biggest advantage of physical gift cards is that they give a genuine feeling of getting a gift. If one were to take environmental considerations for gift cards, digital gift cards benefits reign supreme.
Green gifting trends are on the rise. According to a SustainBrands survey, 58% of consumers are gravitating toward brands that champion or support sustainability. Digital gift cards are certainly sustainable, easy to use, convenient for both customer and brand and offer instant delivery. Recycling plastic gift cards is a possibility to ensure that they are used for a long time, but most consumers tend to throw them off after the first usage.
There are no shipping or packaging costs, unlike physical gift cards
You don’t have to double-check postal addresses. It is as easy as sending an email
Provides instant gratification since digital gift card recipients don’t have to wait for postal delivery
Your selection of rewards becomes more flexible when you offer digital gift cards
You can even automate the delivery of gift cards to give immediately recognize efforts of survey takers, vendors, prospects, or employees
Green gift card options
with digital changes how customers see your brand
At least 10 billion plastic gift cards are produced annually, according to the International Card Manufacturers Association. Digital gift cards can drastically reduce this number and result in sustainable gift card options. This is why you should offer electronic gift cards for eco-conscious consumers.
It presents
green gift card choices for consumers
The
plastic gift card environmental impact
is drastically reduced
eCommerce businesses demonstrate their commitment to the environment
While gift cards show your love to the recipient, digital ones don’t throw any strain on the environment
Wrapping Up:
Digital gift cards and the environment go hand-in-hand since they reduce plastic gift cards’ ecological footprint. You can be a better store by following gift card sustainability practices and making more digital gift cards than physical ones.
If you are looking to add gift cards to your current structure, the team at 99minds will be thrilled to help you. Get in touch with us to understand how we can help with physical and digital gift card programs.
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