Holiday Shopping: Gift-Card Gifting is Shifting

By Julie VerHage Features FOXBusiness

Holiday Shopping: Gift-Card Gifting is Shifting

Gift cards have consistently been a top gift during the holiday shopping season, but the way people send and receive them is changing.

Gift cards have consistently been a top present during the holiday shopping season, but the way people send and receive them is changing.

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An overwhelming 72% of Americans have given a gift card, but instead of purchasing the physical version, electronic cards are continuing to gain in popularity, especially among millennials. Mobile gift card usage among this generation is double the level of older adults, according to

“Younger generations have grown up with a smartphone and are more likely to feel comfortable texting or emailing a gift card,” said Jeanine Skowronski, credit card analyst. “It’s also super easy. If you forget someone’s birthday, you can just send them a gift card electronically.”

Gift cards are once again expected to be a top present during the holiday season, with 12% planning to spend more on gift cards this year, according to Nielsen data. Online spending is also expected to increase, with 17% of millennials planning to spend more online this year.

Another factor is that millennials are more than twice as likely to lose traditional plastic gift cards as older adults, with 40% of 18-29 year-olds admitting to losing a gift card, according to That compares to only 26% of the total population that says they have lost a gift card.

With the rise of mobile payments, retailers are increasingly offering electronic gift cards. Fifty-nine percent of gift cards are now offered electronically, up 18 percentage points from 2010, according to Another way to lure in consumers is a loyalty program, with popular chains such as Starbucks among the first jump on board.

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“In 2013, payment for purchases by use of all mobile devices in the U.S. totaled $1.3 billion,” Starbucks CEO Howard Schultz said in a conference call following the coffee chain’s earnings release last week. “What you’re going to see in the years ahead will be a rapid acceleration in mobile device purchases,” Schultz said, adding that close to 7 million transactions per week, or 16% of all transactions conducted in U.S. Starbucks stores, occurs via mobile device.

“Gift cards are a great entry point for mobile payments, and many retailers are starting to replicate what Starbucks has done,” Skowronski added.

Starbucks’ loyalty program rewards consumers who make purchases using Starbucks gift cards. Once someone buys one of their gift cards, they can load the gift card into a Starbucks app on their phone, taking away the need of holding on to the physical card. Consumers can then “reload” the card in the app or online.

Apple recently launched a mobile payment system known as Apple Pay, meaning data on the growth in electronic gift cards will be closely watched by both the tech giant and industry experts as the holiday season approaches.

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