Although use of digital gift cards has not gained widespread acceptance, it is growing — especially for tech-savvy Millennials.
Moreover, the use of physical cards remained a preferred “consumer choice” as concerns over mobile device security impedes adoption of digital gift cards, according to a consumer survey commissioned by Store Value Solutions (SVS), a global provider of gift card and stored value services.
The survey showed that 64 percent of respondents have no experience using a digital gift card. But the poll revealed that 29 percent of consumers between 18 and 35 “indicated that they have purchased or received digital or online gift cards within the past year.” For shoppers between 36 and 55 years old, 18 percent said they purchased or received a digital gift card, which compares to 13 percent of those between the age of 56 and 65.
“In focus groups conducted by SVS, consumers expressed uncertainty and concern about security aspects of the digital gift card giving and redemption process, from purchasing to sending, receiving to redemption,” the researchers said in their report. “Many consumers were concerned about whether dollars had been successfully loaded onto a card, and whether they could be sure a recipient received or saw their digital gift card.”
One solution to increase use and acceptance of digital gift cards may be as simple as education. “Our analysis suggests that retailers might benefit by conducting a dispassionate assessment of their application and making the necessary corrections to make it a seamless experience,” the researchers said in their report. “Then they can devise ways to take consumers through the learning curve, making usage easier and even fun for their customers.”
The survey also showed that consumers “are currently struggling with the concept of downloading digital gift cards to apps or digital wallets,” the authors of the report said. “Fifteen percent of consumers report having downloaded apps, and 53 percent of consumers who have bought or received digital gift cards report having printed them out to present at the time of payment.”
Jenny Parris, head of global marketing and product at SVS and a study author, said one of the “less intuitive findings from this research is that there was a modest increase in comfort level over redeeming cards via mobile.”
“And as might be guessed, there was a spike in digital adoption among younger consumers, as well as males,” Parris added. “Most importantly, however, there are many steps retailers can take right now, to speed consumer migration to digital and mobile formats.”