Gift cards are one of the most popular presents in the United States. They take the pain out of shopping for individual gifts, especially during the holiday season, and give recipients the flexibility to choose a product of their liking.
When did the concept of gift cards first emerge? Currently, there isn’t a single, authoritative time-line of gift cards, though there is a general consensus that gift cards or at least products imitating them, made their appearance in the early 90s.
Luxury specialty department store Neiman Marcus was the first to sell gift cards in 1994. As the retailer wasn’t entirely sure what kind of contribution it would make to its marketing equation, the gift cards were sold as a novelty item and not displayed along with other products. Blockbuster LLC (formerly Blockbuster Entertainment) was the first to display gift cards in 1995, which sparked a new revolution and created a frenzy among businesses. Initially, Blockbuster sought to replace gift certificates that were being counterfeited with color printers, the latest invention to hit the market back then.
There are other stories around the early beginnings of the gift card. The Exclusively Yours Card was launched in the early 90s – some call it the first stored-value gift card of its kind redeemable at multiple retail locations. This was followed by cards that could be redeemed at a single store, register or counter.
Jumping on the gift card bandwagon
In the late 90s and the 2000s, more brands experimented with gift cards. Walgreen led this movement, first testing the idea with a couple of retail brands, and then expanding to include more. The drug retailing chain was among the first to include gift card buying racks in stores. Safeway also launched its own gift card and then started offering others in 2001.
Even as early as 2003, about 53 percent of large retailers in Canada were making cards available. In 2005, close to 82 percent of large retailer-owned stores had begun offering gift cards. The sales impact of gift cards also became clearly evident. While major clothing stores offering the cards registered $2 million in sales per store, those not offering them averaged about $1 million per store.
The age of digital gift cards
According to a recent news report , Starbucks processed over 40 million new digital gift card activations during Q1, in the United States and Canada. Christmas shopping alone accounted for two million new activations per day. Even better, Starbucks say that a majority of the gift card recipients are new customers with the opportunity to interact with the brand for the first time, which is no doubt a great value addition to the coffeehouse chain’s sales efforts.
Not surprisingly, the popularity of E-gift cards has surged in recent years. Walmart, Amazon and Target are just some among the sea of big names offering digital cards to consumers all over the globe.