There has been quite a stir this week as the Washington Post proclaimed Millennials Prefer E-Gift Cards. Why? Three reasons:
1) More 18-29 year olds have used electronic gift cards than people in older age groups
2) If lost, e-gift cards can be retrieved from either an email inbox or a mobile wallet
3) They are more convenient
Those are three compelling reasons for sure! There is only one flaw in the Post’s logic…. us non-millennials also like convenience and don’t enjoy losing gift cards.
The real headline is this…The e-gift card category is growing rapidly – and for good reason. Digital gift cards are more convenient, more customizable, more practical, and more immediate than their plastic cousins.
According to the CEB TowerGroup’s “Gift Cards State of the Union 2013” – e-gift card sales were $300 million in 2012 and projected to be $10 Billion in 2016. What industry segment can you think of that will grow with that trajectory? In this era – there is an expectation for everything to be digital – and gift cards are no exception.
Why are e-gift cards so awesome? Countless reasons – here’s just one:
The Benefit of Now.
They can be delivered immediately. On one occasion, I was headed to a wedding party and I had no gift. I’ve been burned before by grabbing some trinket on the fly and needed something last minute. I ordered an Amazon.com gift card from the driveway of the host’s house using my iPhone – it was delivered in seconds and, as it turned out, was the recipient’s first choice. Zero to Hero from the driveway.
Contrast that with my experience with my credit card rewards program. I had been using my Visa all year and had a boatload of points saved up to redeem for rewards. While browsing the catalog, I realized they had Amazon.com gift cards as an option. I selected $300 and assumed they’d be delivered to me immediately – or at least soonish, right? When the cards did not arrive, I forgot about the selection – until 3 weeks later when in the mail 3 $100 plastic Amazon.com gift cards arrived. What a disappointment. I went from online selection to online shopping – with a 3 week delivery period to get the plastic to my house.
In the incentive world (which is our business here at Tango Card), immediacy is even more critical. When a manager spots behavior that exemplifies the company culture it is critical to reward instantly (not 4-6 weeks later). E-gift cards are enabling incredible business results across all of our corporate customers for many reasons. The immediacy of delivery is just one of them.
So – while Millennials definitely prefer E-gift cards for all the right reasons, I am here saying all the rest of us do too.
Written by Nat Salvione
Nat Salvione is VP of Business Development at Tango Card. He has been soaking in the prepaid industry for 15 years with companies such as Incomm, Coinstar, and Giftcertificates.com. With prepaid industry leadership roles under his belt in partnerships, product and sales, you might say he knows his stuff.