It\u2019s rare to witness a classic payment instrument not just endure but thrive by reinventing itself. Such is the case with gift cards.<\/p>\n
Mary Bailey<\/a>, senior product manager for Bank of America<\/a>\u2019s gift card program, has witnessed this evolution firsthand over nearly two decades. Bailey recounted that when she first began working with gift card<\/a> programs, issuers were limited to offering them as physical cards in physical stores. However, over the last 18 years, the industry has expanded purchase options by form, specifically digital<\/a>, and increased the places where they can be purchased.<\/p>\n Gift cards have blossomed into a sophisticated tool for consumer engagement, brand building and revenue generation for merchants, she said.<\/p>\n This evolution signifies a shift toward omnichannel<\/a> accessibility as merchants are no longer confined to selling gift cards exclusively in their brick-and-mortar stores. They now use diverse channels, including third-party malls, online platforms and their proprietary merchant apps, facilitating a seamless digital experience for consumers, she said.<\/p>\n This approach aligns with findings from a Bank of America survey, which underscored what Bailey called \u201cgrowing popularity and changing behaviors around gift card usage.\u201d The survey found that 81% of consumers bought a gift card in the past year, which was 6% higher than the year before.<\/p>\n The appeal is widening because \u201cyou can now add that physical card to your [digital] wallet<\/a>, if you want to add it to your Apple Wallet<\/a> or your Google Wallet<\/a>,\u201d she said.<\/p>\n A Strategic Asset<\/strong><\/p>\n From a merchant\u2019s perspective, gift cards remain a highly strategic asset, Bailey said. They are a cost-effective way to get consumers into stores (online or offline) while making sure that a consumer can buy an item or service they want, versus the hit-or-miss proposition of picking out a physical gift for someone.<\/p>\n For consumers, the instant, digital accessibility of cards stored in a digital wallet also helps with the problem \u201cof unredeemed gift cards that might end up in a drawer,\u201d she said.<\/p>\n Technological advancements like push notifications are also contributing to higher redemption rates, prompting users to make sure they spend that last $10, for example, which might still be left on a card.<\/p>\n