Gift Card Market to Grow by USD 1.1 Billion (2024-2028) as AI Redefines Landscape, E-Commerce Boosts Revenue - Technavio

NEW YORK, Nov. 25, 2024 /PRNewswire/ -- Report with market evolution powered by AI - The global gift card market  size is estimated to grow by USD 1.1 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of over 14.46%  during the forecast period. Growth of E-commerce sector is driving market growth, with a trend towards rise of open-loop gift cards. However, additional loss of money in using gift cards  poses a challenge.Key market players include Alighieri, Blackhawk Network Holdings Inc., Card USA Inc, Duracard Plastic Cards, Fidelity National Information Services Inc., Fiserv Inc., FleetCor Technologies Inc., Givex Corp., Hennes and Mauritz AB, InComm Payments, JIFITI PRODUCTS, Kindcard Inc., PineLabs Pvt. Ltd., Plastek Card Solutions Inc., Runa Network Ltd., Square Inc., Tele Pak Inc., TransGate Solutions, Village Roadshow Ltd., and Yiftee Inc..

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Key Market Trends Fueling Growth

Gift cards have become a popular trend in both physical and digital retail spaces. Prepaid cards loaded with a specific amount of money are widely used for various payments at stores, websites, restaurants, and even for experiences like travel and OTT platforms. Consumers love the convenience of gifting without the hassle of carrying cash or tangible gifts. Businesses, retailers or brands, other businesses, and corporate clients use gift cards as rewards & incentives for customer loyalty, employee engagement, and B2B sales. Digital gifting options have gained popularity among younger generations, especially Millennials and Gen Z, who prefer cashless transactions and e-commerce activities. Impacting factors include loyalty programs, customer behavior, internet penetration, and the Demonetization and Digital India initiatives. Market participants include FinTechs, PayTechs, and mobile wallets, offering digital platforms for gifting, making the process more practical, customizable, and environmentally friendly. Strategic alliances between retailers, travel companies, and content platforms like SonyLiv, Zee5, MakeMyTrip, Yatra, Cleartrip, Thomas Cook, Ola, Starbucks, Domino's, Chaayos, and E-Commerce Market have further boosted the trend. Gift cards serve as a marketing tool for brand owners, offering tax-advantage cards, e-gifting, M-commerce, and E-commerce options. 

An increasing trend among vendors is the launch of open-loop gift cards instead of closed-loop ones. Open-loop cards, which are not limited to a specific business and are branded with payment card processors like Visa, MasterCard, and American Express, offer greater flexibility for customers. With acceptance almost everywhere, these cards have gained popularity. InComm Payments, a leading UK-based company, introduced Vanilla Go, a global open-loop gift card brand, several years ago. Continuous innovation in this segment is driving growth for vendors. 

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Market Challenges

• Gift cards have become a popular payment method for consumers during special occasions like birthdays, holidays, and other celebrations. Prepaid cards, offering an amount of money for payment at various stores, websites, restaurants, and retail establishments, have gained traction among businesses and individuals alike. For the giver, convenience is a key factor, as digital gifting options allow for instant delivery. However, challenges persist. Consumers prefer tangible gifts, and younger generations, including Millennials and Gen Z, increasingly opt for cashless transactions. Retailers and brands, other businesses, and corporate clients use gift cards as rewards & incentives, employee engagement tools, and marketing strategies. Impacting factors include loyalty programs, customer behavior, internet penetration, and the growing popularity of mobile wallets and digital platforms. In the retail sectors, travel companies, OTT platforms like SonyLiv and Zee5, and food chains such as MakeMyTrip, Yatra, Cleartrip, Ola, Starbucks, Domino's, and Chaayos, have embraced gift cards as a strategic alliance to boost sales, cash flow, and customer loyalty. Digital services, including e-commerce marketplaces and spa services, have also seen in demand for digital gifting options. The challenges for market participants include tax-advantage cards, e-gifting, M commerce, and e-commerce, as well as the need for strategic alliances and the integration of digital cards, virtual cards, and mobile gift cards into their offerings. The impact of demetization, the Demonetization initiative, and FinTechs and PayTechs on the payment methods and customer journeys in physical retail spaces and online retail spaces continues to shape the gift card market.
• Gift cards offer an additional spending opportunity beyond the initial credit. However, they come with certain challenges. For instance, some cards have expiration dates, requiring users to utilize them within a specified timeframe. With busy schedules, this may result in unused funds or even the loss of the card. Additionally, gift cards are available in various denominations, leading to leftover balances after purchases. These unused amounts cannot be refunded or transferred, resulting in wasted funds. To mitigate these issues, consider digital gift cards or setting reminders for expiration dates.

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Segment Overview 

This gift card market report extensively covers market segmentation by

1. Type 
• 1.1 E-gifts cards
• 1.2 Physical gift cards
2. Distribution Channel
• 2.1 Offline
• 2.2 Online
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 Middle East and Africa
• 3.5 South America

1.1 E-gifts cards-  E-gift cards have become a popular and convenient gifting solution in the retail sector, offering enhanced versatility and flexibility over traditional physical cards. These digital cards are instantly delivered via email, eliminating logistical barriers and serving as a suitable last-minute gifting option for consumers with busy lifestyles. The growth of e-gift cards is driven by the increasing digitalization of the retail industry and the convenience they offer to both senders and receivers. In the corporate sector, e-gift cards have gained traction as a preferred gifting option for employees, clients, and stakeholders, reducing the effort required to select personalized gifts. Vendors benefit from e-gift cards as they eliminate printing costs and can be easily integrated with their core products and services, increasing operational efficiencies. The launch of full-service gift card malls, such as TheGiftCardShop.com by InComm Payments, further simplifies the process of sending e-gifts. These factors are expected to fuel the growth of the e-gift card segment in the market during the forecast period.

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Research Analysis

Prepaid gift cards have revolutionized the way we express love, gratitude, and appreciation. These plastic or digital cards allow the recipient to use a specific amount of money for payment at various stores, websites, restaurants, and businesses. The convenience of gift cards makes them a popular choice for consumers, especially younger generations, who prefer e-gifting, M commerce, and e-commerce. Consumer behavior trends show an increasing preference for gift cards as they offer flexibility and convenience. Retail outlets, restaurants, and businesses use gift cards as a marketing tool to boost sales and customer loyalty. Strategic alliances between brands and card issuers further expand the reach of gift cards. Digital and virtual cards add to the convenience, allowing instant delivery and easy redemption. Mobile gift cards offer contactless payment options, making them a preferred choice during the pandemic. With the rise of e-commerce and m-commerce, gift cards have become an essential component of the retail landscape.

Market Research Overview

Prepaid gift cards have revolutionized the way we express love, gratitude, and appreciation. These cards allow the giver to load an amount of money onto a card, which can be used for payment at various stores, websites, restaurants, and businesses. The recipient enjoys the convenience of making cashless transactions for their purchases, especially during special occasions like birthdays, holidays, or other celebratory events. Digital gifting options have become increasingly popular among consumers, especially younger generations such as Millennials and Gen Z. With the rise of mobile wallets and digital platforms, consumers can now send digital gift cards to their loved ones online. This trend is impacting various retail sectors, including travel companies, OTT platforms like SonyLiv and Zee5, food chains such as Starbucks, Domino's, and Chaayos, and e-commerce marketplaces. Factors like loyalty programs, customer behavior, and internet penetration are driving the growth of the gift card market. Brands and retailers use gift cards as a marketing tool to boost sales, customer engagement, and cash flow. Other businesses, including corporates and individual users, also use gift cards for B2B sales, employee engagement, and tax-advantage cards. The convenience, customizability, and practicality of gift cards make them a preferred choice for consumers. Moreover, the growing trend of e-gifting, M commerce, and strategic alliances between digital services and physical retail spaces are further expanding the market's reach. The impact of the Digital India initiative and demonetization on e-commerce activities have also contributed to the growth of the gift card market. FinTechs and PayTechs have entered the market, offering innovative payment methods and customer journeys, making it a dynamic and exciting space to watch.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• E-gifts Cards
• Physical Gift Cards
• Distribution Channel
• Offline
• Online
• Geography
• North America
• Europe
• APAC
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio