Welcome to the World of Gift Cards in 2024

When someone thinks of Neiman Marcus, it usually evokes images of elegant fashion, luxurious furnishings and other incomparable merchandise, but not gift cards. Yet, amazingly, Neiman Marcus was the first American retailer to launch pre-paid debit cards, known as gift cards, in 1994.

A year later, Blockbuster Video launched gift cards on a nationwide scale. They were physical cards that customers could purchase and redeem for rental items or snacks in the store. It was also an excellent replacement for those pesky, easy-to-

counterfeit paper gift certificates.

Today, gift card sales have become a $534 billion annual industry. They are a wildly popular alternative to traditional gifts, particularly for those who are challenging to shop for. Gift cards also offer convenience for the giver since they do not have to spend time choosing a specific gift.

In a recent survey, over 57% of participants said they would prefer a gift card over a

physical item.

The National Retail Federation states that 81% of all Americans have given or received a gift card at least once. Gift cards can also be used as a way for businesses to promote their products or services. Luckily for merchants, not all gift cards are—for various reasons.

CNBC reported that a whopping 47% of gift card owners eventually lose out on gift money. That represents a portion of merchants' profits. In 2019, Starbucks announced in its annual report a $140 million gain from unused gift cards; department store Nordstrom had $17 million; and The Cheesecake Factory received $8 million, referred

to as “breakage.”

According to Wikipedia, National Use Your Gift Card Day is a shopping holiday in the US that takes place yearly on the third Saturday of January. It is an unofficial observance, with an inaugural date of January 18, 2020. The day is utilized to encourage people to use their gift cards. The idea gained traction in the retail industry, with major chains supporting the holiday.

There are a few key differences between physical and digital gift cards.

Physical gift cards are usually purchased in a store. Depending on the card's terms, they can be used in-store or online at participating retailers. Physical gift cards are

typically made of plastic and can have a company logo, design or message.

Digital gift cards, also known as e-gift cards, are often delivered with a numerical or QR code that can be used at the checkout to redeem the card's value.

One significant difference between physical and digital gift cards is the delivery method. Physical gift cards must be mailed or hand-delivered, while digital gift cards can be delivered instantly via email or text. This makes digital gift cards a convenient option for last-minute gift giving or for recipients who live far away.

Anyone can buy a gift card off the rack, but customized gift cards allow you to send a personalized message.

It’s a simple process: Upload an original photo and text so each gift card is personally designed for the recipient. They can be sent for any occasion, such as a birthday,

Valentine’s Day or graduation.

Customized gift cards are becoming increasingly popular with the younger generations. Here are a few vendors who offer customized gift cards:

GiftCards.com

GiftCard Granny

Amazon
Vanilla Gift Card

Amazon gift cards

Walmart gift cards

Home Depot gift cards

Best Buy gift cards

Lowes gift cards

Foot Locker gift cards
Nike gift cards
Starbucks Nordstrom gift cards
Bed, Bath & Beyond gift cards

Sam’s Club gift cards

Dick’s Sporting Goods gift cards

Sephora gift cards
Apple gift cards
Kohl’s gift cards

eBay gift cards

Because gift cards grew in popularity quickly, it was only a matter of time before states and Congress got into the act. As a result, gift cards are regulated at the federal and state level. On the national front, the Credit CARD Act of 2009 established several

protections for consumers who use gift cards which include:

1. No expiration dates: Gift cards cannot expire within five years of being issued, or from when funds are last added to the card.

2. No fees: Gift cards can only have activation, maintenance, or dormancy fees if the card has not been used for at least one year. A price must be disclosed to the

consumer if it is charged.

3. Balance disclosure: If a gift card balance is requested, the issuer must disclose the credit to the consumer free of charge.

4, Replacement: If a gift card is lost, stolen, or damaged, the issuer must replace the card or the remaining balance on the card at no cost to the consumer. A

paper receipt is usually required for this type of transaction.

In addition to these federal protections, several states have laws regulating gift cards. These laws may include additional protections, such as prohibiting expiration dates or fees on gift cards or requiring that the remaining balance on a gift card be refunded to

the consumer if the balance falls below a certain amount.

Store Gift Cards allow you to shop at a specific retail store or chain of stores. These cards are often reloadable, meaning you can use them multiple times. They are ideal for those who want the flexibility to shop at multiple locations.

Restaurant Gift Cards can be used at specific restaurants or chains of restaurants. These cards can be easily reloaded whenever desired and are perfect for foodies who love trying new things.

Cinema Gift Cards can purchase movie tickets or rentals at a specific theatre or chain of theaters. They are ideal for cinema enthusiasts.

E-Gift Cards, also known as digital or virtual cards, can be used to shop at certain online retailers. They are convenient for those who prefer to shop from the comfort of their own home.

Travel Gift Cards can be used to book travel accommodation or airfare. Are you looking for a getaway? Travel gift cards allow you to explore new places and are ideal for frequent commuters or travelers.

Gas Gift Cards can be used to purchase gas at specific stations or chains of stations.

General Purpose Gift Cards can be used anywhere that accepts major credit cards. They are most commonly branded as Visa, MasterCard and American Express. These cards are only sometimes reloadable and offer the greatest flexibility for use anywhere.

Gift cards represent a huge industry that continues to grow annually. In a quest to dig up some interesting facts and figures, I found that the higher your income, the more likely you’ll have purchased or received a digital gift card.

Your home location can also make a big difference to whether you have purchased or obtained a digital gift card. Midwesterners are less likely to have purchased a digital gift card than their eastern and western counterparts.

E-gifting is the fastest-growing segment of gift cards.

81% of American consumers have given or received a gift card

73% of consumers said they would purchase a gift card during the 2022 holiday

season

62% of gift card purchasers use digital gift cards as last-minute gifts

53% said they would be interested in storing gift cards on their phones

26% annual growth in gift cards

8% will convert their gift cards into cash

$3 billion every year wasted with unused gift cards

2 is the average number of gift cards purchased by a consumer in 2022

$1 trillion market is expected by 2030.

There will always be a certain number of people who receive gift cards who would rather have the cash than the gift card itself. According to Card Cash, that number represents about 8% of all gift cards purchased. Considering over $534 billion in gift cards were bought last year, that means billions in unwanted gift cards end up on the

secondary market each year.

Unwanted gift cards can save on goods and services you probably already use. As you’ll discover, there are quality outlets for purchasing gift cards online and, sadly, several undesirable outlets. Rather than you wasting time, we have vetted all the online resources available in this publication.

Savings from discounted gift cards can add up fast. When you get down to it, there is only one way to "save” money: by not spending it. Making multiple efforts to save small

amounts of money can lead to a substantial lump sum in your savings account.

Take advantage of small saving opportunities when they arise. Anytime you can extend

and maximize your savings, it may take a minor effort, but it is rewarding.

Discounted cards help fight inflation. According to the Federal Reserve, the year 2022 had a 6.5% increase in the inflation rate. While gift cards cannot cover your utilities or home mortgage, you can use them in many areas. The median savings of discounted gift cards average 12.7% off total face value. That’s almost $13 saved for every $100

spent.

Gift card sellers can expect to receive around 70–80% value of the card. In other words, the seller will receive about 70 to 80 cents on the dollar. The exact amount really

depends on the discount outlet’s inventory and the retailer’s popularity.