Millennials most likely to prefer digital gift cards

According to Giftcard.com, more than $100 billion is spent on gift cards annually in the U.S. with 93% of people in the country receiving or purchasing one annually. While physical gift cards have dominated, the popularity of e-gift cards is projected to rise.

Among Americans, a survey by United Online found that physical gift cards remain the most popular, with more than three-quarters preferring them to digital cards (78.3%), despite 76.1% having received a digital gift card in the past.

However, out of all the age groups, Millennials prefer digital gift cards more than any other (33.3%). In particular, Millennials found the ability to include a personalized video or photo greeting with digital cards to be an “appealing” or “very appealing” factor.

When asked what aspect of digital gift cards were most appealing, respondents cited “ease of overall use” and “ease of redeeming” (both 84.7%) as the top reasons when receiving as “ease of purchase” (94.1%) and being able to send the card to a recipient’s phone or email (87.7%).

The survey also suggests that, with 1-2 physical gift cards never being redeemed by 73.8%, because the recipient forgot about them, digital gift cards provide retailers with more opportunities to remind recipients to use their gift, as well as that gift card being always at hand, particularly when on a mobile device.

United Online’s findings closely echo those of recent research from shopper marketing firm Blackhawk Network.