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Holiday gift card boom

Posted by Michael Bloch in ecommerce (Tuesday October 16, 2007 )

Gift cards will be big business this holiday season both offline and online; to the tune of around $35 billion.

According to this report on Emarketer, over a quarter of all gift cards last year were sold online.

Once considered a thoughtless gesture; cards, coupons and vouchers have now gained widespread acceptance as a legitimate gift. After all, who knows more about what a person wants than the recipient and they are especially attractive to folks who don’t have a lot of time to shop around.

I think we’ve all had our share of gifts we really have no use for and while it’s the thought that counts, it’s nice to know that through giving a gift card, the recipient will pick up something they want or need :).

Gift cards don’t have to be a physical item you need to ship, they can also be purely electronic and printed out by the purchaser. Most good quality shopping carts offer this feature, so check yours for this functionality.

For the merchant, there’s some great advantages to offering gift vouchers, including:

a) The recipient knows where the gift came from; so you’ll have an opportunity to gain the person as a repeat customer

b) People who use gift vouchers often purchase more than the coupon value.

c) You’ll have the contact details of both the giver and recipient for follow up marketing

If you’re thinking of switching shopping carts or are still in the process of building your site and haven’t settled on a cart as yet; check out some of these shopping cart services and software packages; all offering this important functionality.


2 comments for Holiday gift card boom
  1. Hi Michael, I saw your research article and was compelled to respond. This could get very in depth, but I’ll try and keep it as short as possible.
    I’m in the gift card resell business and run an ecommerce site, We are really hoping gift cards are strong online this holiday season. We offer a long list of brand named cards.
    Our unique offering is extreme gift wrap. We are introducing packaging that offers a better opening experience specifically to solve the ho-hum presentation problem we all experience with gift cards.
    Technically, we had a challenge finding a shopping cart solution that worked for what we offer. Our problem is that any gift card can be matched to any gift wrap, and that one order could have any combination of product associations. What I mean by this is easier explained when we think about how someone might shop for gifts. They are actually buying for someone else and many times for several people at a time. Sally would like a Barnes and Noble gift card inside a pop-up greeting card, David would like Home Depot gift card in a concrete brick (Block Party) and Mom would like a Spa Finder gift card, but she doesn’t want it wrapped because they want to do something else at home. So, five total products but very specific groupings. This might not seem like a complex issue at first glance, but in my experience most shopping carts try to solve this grouping through attributes. We could not make gift cards an attribute of gift wrap, nor gift wrap an attribute of gift cards since in any situation, they might be purchased independently.
    Today, we elected to have every product a unique, independent item. To help customers and help us map the right gift card to the correct gift wrap we have provided a space where they can add who is to receive the gift card. As in any gifting situation this is our “TO:” gift tag. For the gift wrap we provide a “TO:, FROM:, and MESSAGE:” form. We then map the TO: of the gift card to the TO: of the gift wrap. So, although not a highly technical solution it works well operationally. Our next steps will be to implement a tighter set of rules so there are fewer ways to make mistakes, like ordering gift wrap that can only be produced in our warehouse with no gift card in the gift wrap. Come see it in action and try one of our one of a kind gift wraps…we’ll provide the stethoscope.

    Comment by Jim Brotherton — October 18, 2007 @ 9:44 am

  2. Hi Jim, thanks for your input and the detailed explanation of the challenge and your solution! I’ll dive out and take a peek soon – I wish your business a prosperous shopping season!

    Comment by Michael Bloch — October 20, 2007 @ 2:28 am

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