Gift cards are a popular gift choice and payment option for various industries as they offer more privacy, are easy to use, and help with budgeting. A gift card is a digital or physical card that is loaded with a certain amount of money that may be used to pay for products and services instead of cash.
Gift cards look to be a popular gift choice in 2024 because they are flexible, convenient, and can be customized. According to the Business Research Company, the international market for digital gift cards was worth $342.66 billion in 2022 and $405.17 billion in 2023. It’s anticipated that the size of the digital card industry will reach $740.41 billion by 2027, which is a rise of more than 50%.
How do Gift Cards work?
Gift cards are fairly simple. Funds are loaded onto the card, which the loader or the recipient of the gift card can use at designated places. Gift cards can either be open-loop or closed-loop, with closed-loop ones being very restrictive about where they can be used, while open-loop ones can be used at any place that accepts the card’s brand.
Top 5 Industries which accept Gift Cards:
Gift cards have become a widely accepted method of payment in many industries. Here are a few examples:
1. Entertainment
Online Betting Platforms:
Nowadays, for various reasons ranging from personal to regulatory, gambling enthusiasts do not want to provide bookmakers with their personal or financial information. They prefer using gift cards to finance their hobby. There are a number of reputable online betting sites that now accept gift cards due to market demand. This allows bettors to play online with an added level of anonymity, whether playing casino games or placing sports bets.
Movie Theaters:
Traditional movie theaters, like Regal Cinemas, and online streaming platforms, like Netflix, both accept gift cards. Watching movies as a means of entertainment is as popular now as it ever was, and gifting and receiving gift cards to see a movie is a popular choice.
2. Retail
Numerous retailers accept gift cards as a form of payment. These include, but are not limited to Amazon, Walmart, Target, and Best Buy. Some retailers even give out gift cards to their customers for promotional reasons.
3. Travel and Tourism
Airlines:
Some renowned airlines like Delta, American Airlines, and Southwest allow travelers to use gift cards towards their flight fees and other travel expenses. Gifting a flight to someone can be very tricky since you would need to know all of their travel information. However, if you give someone a gift card to an airline, they can book their own flight easily using the card balance. This makes airline and travel gift cards in general a popular choice among consumers.
Hotels and Alternative Accommodations:
Room reservations and other related expense payments can be made using gift cards at certain groups of hotels and booking platforms. Some of the hotel chains that accept gift cards are Marriott, Hilton, and Hyatt.
4. Restaurants
Examples of restaurant chains that offer gift cards to their customers allowing them to treat themselves or gift a friend or relative a meal are Olive Garden, Applebee’s, and Chili’s. Restaurant gift cards are a popular gift option as dining out with others is always a fun activity.
5. Health and Wellness
Spas and Salons:
Spas are big business and an ideal gift. For self-care enthusiasts, spa gift cards are perfect. With a number of salons and spas offering gift cards, there’s no shortage of options.
Fitness Centers:
Planet Fitness and Anytime Fitness are examples of fitness centers that accept gift cards as payment for fitness classes.
Pros and Cons of Gift Cards:
Pros
- Gift cards can be a suitable alternative payment method for those who would rather not use a credit card or cash
- For some activities gift cards offer an extra layer of anonymity
- They can be issued as a holiday or special event gift
- Gift cards are a useful tool for budgeting and preventing bank overdrafts
- They are easy to use and very convenient
- They offer the recipient the freedom to choose what they want for themselves
- As a company, gift cards can be used as performance-based incentives or motivation tool for staff members
- Gift cards often come with security features, which help protect users from potential loss or theft
- There are occasionally promotions and discounts that some retailers give customers who make purchases using gift cards
Cons
- Small amounts left over on gift cards can be tricky to spend and might be wasted
- The purchasing power of closed-loop cards is limited
- Financial losses should be expected if one loses a physical gift card and fails to report the loss in time
- Gift cards are now being widely used as a way of scamming innocent people, so users should be cautious
How to Get The Most Out of Your Gift Cards?
1. Always Read the Fine Print
Although the same regulations apply to all gift cards, banks or retailers issuing the card may set hidden fees, and expiration dates, or have certain additional policies in place.
2. Keep Your Card In a Safe Place
It is best to use the card as soon as you get it or as soon as you load it because it is very easy to lose, forget, or misplace, and having it replaced might be a challenge. Some gift card issuers will not replace lost or stolen cards, so handle them the same way you would handle cash.
3. Keep Card Details In a Separate Place
You can write down important information like customer service numbers and security codes and keep them safe. If the card is lost, the information can be of help.
Laws Around Gift Cards
The Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act protects consumers by preventing gift cards from expiring for at least five years following their activation date. Inactivity on a card will attract a fee after one year without being used but only if the card clearly states the policy directly linked to that fee.
Conclusion
Whether gift cards are still worth it in 2024 or not remains a personal perspective for many, but according to statistics, the use of gift cards is rising. Although there are disadvantages associated with their use, the advantages of using gift cards make it worthwhile.
