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Mobile Gift Cards: Coming to a Holiday Wish List Near You

Mobile Gift Cards

If you’ve been to a sporting event or concert in recent years, heck, if you’ve ever had a Blackberry, you know how simple it is to scan a barcode from a smartphone. So, it should come as no surprise that mobile gift cards appear to be the next big thing in gift giving.

Much as digital gift cards – those delivered via e-mail and redeemable on retailers’ websites – have risen in prominence along with the popularity of online shopping and are now used by 28% of retailers, according to a study by Transaction Wireless, advancements in mobile phone and point-of-sale technology have paved the way for more extensive adoption of mobile gift cards.  While only 15% of retailers currently offer them, with Starbucks being one of the most notable pioneers, that number is expected to surge to 61% within three years’ time.

But why, exactly, is this important?

Well, there are a number of reasons and it all starts with convenience.  Not only can you easily redeem mobile gift cards online or in a physical store location, but they also go everywhere our phones do, which in this day and age is everywhere we do.  In other words, losing your gift cards or forgetting them at home when you head to the store will be less of a concern, and you also won’t have to choose between a George Costanza-esque wallet and the ability to use gifts for impromptu purchases.  Even if you lose your phone, you’ll still be able to access your gift cards given that they’re stored in the cloud.  Fewer gift cards will therefore go to waste in the future, which is undoubtedly good news considering that $41 billion in gift cards went unredeemed from 2005 to 2011, according to TowerGroup, and $2 billion more are expected to be forgotten about this year.

Mobile gift cards also:

  • Are more customizable:  Since mobile gift cards are deliverable via e-mail, Facebook, or text message, it’s easy to spice things up with a custom message or a picture.  That can go a long way in overcoming the idea that gift cards are lazy or impersonal presents – one of the main knocks against them.  In fact, 38% of retailers believe that personalization is the key to consumer adoption of mobile gifting, according to the aforementioned Transaction Wireless study.
  • Cater to consumer preferences:  When it comes to gift card mediums, 43% of consumers prefer mobile versions, while website gift cards and those sold via Facebook each received the support of 31% of people, e-mail and tablet-based gift cards are each preferred by 28% of folks, and only 14% still have an affinity for traditional plastic gift cards.
  • Lend themselves to budgeting:  In light of the convenience and flexibility of mobile gift cards, you could conceivably purchase one tied to your favorite retailer or restaurant for the exact amount you want to spend there over the course of the week, month, or year and thereby force discipline on your spending habits.  You just can’t allow yourself to purchase another one before your allotted time table is over if this strategy is to be effective.
  • Lower costs:  Plastic gift cards obviously have production and other logistical costs that are irrelevant to mobile gift cards, and retailers also have to spend money developing the in-store displays that are necessary to market them to consumers.

While there are indeed a lot of factors that lend momentum to the widespread adoption of mobile gift cards, that’s not to say the path is without obstacles.  Chief among the roadblocks is the infrastructure required to offer and accept mobile gift cards as well as the idea that a physical card is more appropriate when exchanging gifts in person.  Since retailers must have advanced web technology and the requisite barcode scanners to offer mobile gift cards, only 15% of them are currently able to do so, according to Transaction Wireless.  And while that should be less and less of a concern as time passes and technology spreads, the perceived importance of tangible presents ensures that plastic gift cards won’t go extinct anytime soon.

Ultimately, even though mobile gift cards have a relatively small presence at this time, that doesn’t mean it will be a boring holiday season as far as gift cards are concerned.  Not only does National Retail Federation data indicate that gift cards will be the most requested type of holiday present for the sixth consecutive year, but you can also score gift cards discounted by up to 80% via online marketplaces, sell unused gift cards for cash, and even get someone on your list one of Target’s gimmicky WOW! holiday gift cards, which have “Draw n’ Go technology” that makes them as much a game as a form of payment.
Image: Aleksandra Gigowska/Shutterstock

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