Gift-givers unsure of the contents of a person's DVD collection, with little time to shop or simply at a loss for what to get have long been buying gift cards. Real, plastic, tangible gift cards.
But the sales of electronic cards, a digital alternative, have begun to grow. Atlanta's First Data has been involved in the digital gift card industry for a decade and now offers a gift card to Cold Stone Creamery that can be bought on Facebook said Michael Hursta, the company's vice president of gift cards. Home Depot, the Atlanta-based home improvement chain, has also made strides in its electronic card offerings.
A study by Retail Systems Research, sponsored by Home Depot card administrator CashStar, noted that many retailers have opportunities to increase personalization, through pictures or video, to notify senders when gift cards are opened and to connect sales to social media. However, few do.
Beginning Nov. 1, Home Depot will begin offering digital gift cards with video messages that buyers can record on webcams or upload from their home computers. The company started offering physical gift cards that could include an online video component around Father's Day.
Digital gift cards are often purchased by tech-savvy individuals, last-minute shoppers and businesses that want to give large-scale gifts, Hursta said. Michael Homiak, director of gift cards for Home Depot, said digital gift cards are perfect last-minute presents, or useful to personalize for someone a gift-giver doesn't see very frequently.
"It's definitely becoming more popular," he said.
Still, Hursta said, digital gift cards only make up 1 percent of the total number of gift cards sold. They haven't been readily accepted yet, he said, but Homiak said he sees no difference in how consumers treat plastic and virtual gift cards.
Digital gift cards could help revive a gift card sector that saw sales drop last year, said Howard Davidowitz, chairman of New York retail consulting and investment banking firm Davidowitz & Associates.
"We know how important convenience is, how important time is," he said. "It all seems to relate to convenience. If the convenience and time issues are important, all you have to do is hit a couple buttons and you can send somebody a gift over e-mail."
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