Viewpoint: Staying Relevant through Gift Card Innovations
By Teri Llach, Blackhawk Network
There’s no questioning the popularity and appeal of gift cards—especially during this time of the year. Giving recipients the ability to treat themselves to something they really want or need has become prized among gift buyers. What’s even more exciting is how the concept of gift cards continues to evolve as new brands and card types launch. What’s more, consumer behavior around gift cards can help us maximize sales by catering to needs beyond traditional gifting.
At Blackhawk Network, we enjoy innovating and looking for new opportunities to give value to retailers and consumers. To that end, we conduct research on different segments of prepaid and gift cards that may appeal to consumers. Here are a few innovative uses for gift cards that may drive sales in December and well into 2016.
Using Gift Cards as a Vehicle to Invest (or Teach Kids about It)
Our recent launch of “Gift Cards for Stock” represents an exciting expansion of the gift card category. Gift Cards for Stock will appeal to consumers who want to give something with long term asset-building potential. It’s also an educational gift to teach someone about investing or to help a recipient dip his toe in the market for the first time. This prepaid gift card comes in fixed denominations of $25, $50 and $100 that may be redeemed online to open a brokerage account and purchase a variety of popular stocks (or fractions of stock) or exchange traded funds.
The idea of giving a gift card that ultimately can be redeemed online for stock chosen by a consumer fills a real need today. In Blackhawk’s Gift Cards for Stock survey, we were surprised to learn that only 28 percent of respondents owned shares of U.S. stock, primarily because they didn’t know how to buy it. Investing in the stock market can be confusing and intimidating and Gift Cards for Stock provide an easier way for people of all ages to get involved.
Our research also told us that not only is there a demand for this sort of product as a gift, but also that consumers would purchase Gift Cards for Stock for themselves. Millennials especially are looking for new ways to invest: 43 percent expressed interest in purchasing their favorite stocks; 54 percent said they would purchase stock if it were as easy as buying a gift card; and 46 percent would give a Gift Card for Stock.
Using Gift Cards to Save Money
Many consumers are using gift cards as a way to earn shopper rewards or discounts to stretch their budgets. Great offers on gift cards in retail and online this holiday season make getting a gift card to use before a visit to the mall a great way to save. Also, consumers are seeking out retailers that add loyalty discounts, such as fuel rewards, to gift card purchases to save even more. If you’re a retailer and you’re not promoting your gift cards as a new way to attract consumers, you’re missing a big opportunity.
Deal-savvy shoppers also use gift card exchanges instead of waiting for sales or clipping coupons. Not only do they offer flexibility for the consumer, but gift card exchange sites make gift cards more economical than ever. For example, shoppers purchasing pre-owned gift cards via Cardpool.com can get a discount of up to 35 percent—depending on the brand—which translates into a discount on every purchase with the discounted gift card. By using a trusted gift card exchange marketplace, consumers can get exactly what they want when they want it, and retailers benefit from the foot traffic and spend that they might not normally get if their gift card went unspent.
Using E-Gifts for Self-Use
While plastic gift cards remain the more popular choice for gifting, digital gifts, such as e-gifts and e-codes, are helping to drive rewards and incentive programs in an incremental way. Our research shows that consumers purchase and receive e-gifts through discount or reward programs and use them for personal use far more often than they give e-gifts as gifts.
According to Blackhawk’s Gift Cards for Self-Use and Gifting Survey, when looking at the total number of gift cards purchased in one year, 63 percent of e-gifts purchased are being used by the purchaser. Additionally, the prevalence of consumers purchasing e-gifts at a discount or receiving them through reward or rebate offerings is clear. Thirty-seven percent have purchased an e-gift at a discounted rate and 65 percent have received an e-gift as part of a rebate or reward program within the last year. The majority of those recipients (86 percent) have kept their e-gift to use themselves.
Taking into consideration the rise of gift cards for unique uses—like giving gift cards that can be redeemed for stock, for self-use in budgeting or for earning extra rewards—can help retailers that are looking to stay relevant to their customers. Capturing gift and e-gift card spend will require marketing messages that build upon these trends to help more consumers understand there’s a lot more to gift cards than meets the eye.
1 To redeem Gift Cards for Stock, the recipient must follow the steps on the gift card and packaging.
Teri Llach is chief marketing officer, Blackhawk Network, a pioneer of prepaid gift cards, payments tools and rewards delivered via a robust and convenient network. Teri recently was recognized as one of the Women Driving Payments Change in the Fall 2015 issue of Pay Magazine. She can be reached at Teri.Llach@bhnetwork.com.
About Blackhawk’s Gift Cards for Stock Survey
Blackhawk’s Gift Cards for Stock Survey is an Internet-based survey fielded by Ipsos in September 2015. The sample size included 2,013 American respondents.
About Blackhawk’s Gift Cards for Self-Use and Gifting Survey
Blackhawk’s Gift Cards for Self-Use and Gifting Survey is an Internet-based survey conducted by Blackhawk Network in October 2015. The sample size included 1,000 American respondents.
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore’s goal is to present many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.