Market Trends of US Gift Card and Incentive Card Industry
This section covers the major market trends shaping the US Gift Card & Incentive Card Market according to our research experts:
Digital or E-Gift Cards is accelerating due to E-Commerce Development
Digital gift cards, often referred to as e-gift cards, gift certificates, and vouchers, are electronic counterparts of traditional gift cards provided by retailers. These cards work by utilizing gift codes provided by retailers and can be sent via email or mobile applications. Digital gift cards are frequently used in company development methods to promote enterprises, raise brand awareness, reduce fraud, and attract new clients. The demand for digital gift cards is primarily driven by rising levels of digitization along with the increased penetration of smart devices. Furthermore, the developing e-commerce sector has led to an increase in the use of e-gift vouchers in the US market for providing distinctive and appealing product offerings. The usage of digital or e-gift cards grew dramatically during 2020, owing to the market scenario of social distancing, which improved the value proposition of this category. In recent quarters, the digital or e-gift card market has shown considerable growth, which is likely to continue in the US over the forecast period. Amazon gift cards, eBay, and Mastercard are some of the most popular gifting options in the United States.
Open Loop Gift Cards are becoming Popular among US Consumers
Closed-loop gift cards are often sold by retailers and allow cardholders to purchase anything from that particular business. They are usually limited to a particular retailer and can only be used in the store or on the website of that merchant. Meanwhile, open-loop gift cards function similarly to cash, or more accurately, debit or credit cards that can be used at any merchant that accepts the card, as well as online. Open-loop gift cards are available from a number of major credit card issuers/processors, including Visa, MasterCard, American Express, and Discover. Consumers may have become more interested in open-loop cards at the start of COVID-19 because of their ease and flexibility, as well as the ease with which they can be used. Given the exceptional amount of E-commerce conducted during the COVID-19 as consumers began to practice social distancing, it's also possible that open-loop cards are more appealing than paying interest on credit in a time of economic uncertainty, or that they're regarded as less of a security risk when shopping online.
