As the gift card landscape evolves, brands must keep up with shopper expectations to increase consumer loyalty and retention.
Consumers crave convenience through cashless, contactless, and mobile-first solutions. However, the rise of digital solutions comes alongside a rise in cybersecurity, particularly since more than half of consumers responding to the 22nd Annual Prepaid Consumer Insights Survey from Fiserv have experienced gift card fraud in the past 12 months.
Merchants must walk a fine line between meeting consumers’ digital demands and delivering convenience and security. Consumers’ shifting spending habits ushered-in trends that will reshape future gift card sales. Read on for some noteworthy survey discoveries.
Digital gifting options take the lead
For the first time since the survey was conducted, digital gift cards trump physical ones, with two-thirds of consumers favoring digital cards. Previous Fiserv surveys found that consumers were evenly split, but today’s digital preference is driven by seamless, quick, and convenient experiences.
When choosing digital over physical cards, consumers’ top considerations are ease of purchasing (49%), ease of sharing (51%), and instant delivery (70%). Brands like Apple and Lululemon are answering consumers’ calls by allowing them to purchase and send gift cards directly from their apps. While merchants should optimize their digital landscape, they must also cater to consumers who still prefer physical card transactions.
Take advantage of the rise in P2P gift card popularity
P2P apps like Venmo, CashApp, and PayPal have also evolved. Originally built to easily send money to individuals and pay for items, these apps have recently incorporated functionalities to send virtual gift cards, too. Merchants should take advantage of this trend since more than one-third (36%) of consumers sent 1-2 cards through P2P apps during the last 12 months, while 34% sent 3-4.
This trend looks to continue to grow in 2025, with more than half (54%) of consumers planning on sending significantly more gift cards through P2P platforms. As a result, merchants should consider offering a physical-meets-digital P2P pairing like a recent Hallmark-Venmo partnership. This collaboration allows consumers to purchase a physical greeting card equipped with a handy QR code for Venmo payments.
Acknowledge and tackle gift card fraud
Since 57% of consumers have experienced gift card fraud in the past 12 months, they are cautiously approaching gift card purchases. In fact, three-quarters expect gift card fraud and scams to worsen in 2025.
Because of this uptick, 59% of consumers are increasingly cautious when using gift cards, 48% have increased skepticism toward gift cards, and 25% have lost trust in gift cards. To overcome these barriers, merchants must acknowledge the rising abuse of gift card scams and fraud to help repair lost trust, and let consumers know how they are trying to prevent it.
Consider the actions taken by Walmart. The retail giant created an internal database that tracks where gift cards are purchased and spent and, when moving too quickly across the U.S., are frozen. They also lock down cards trying to be redeemed from those outside the country.
Enhance loyalty program engagement
Nearly three in five (59%) consumers prioritize shopping where they are loyalty members, with 54% joining loyalty programs to maximize savings. Merchants can capitalize on this by collaborating with other brands and offering joint savings for consumers while also increasing cross-brand engagement and loyalty. Consider mimicking the Delta-Starbucks partnership in which consumers who purchase $150 in Delta gift cards receive a $10 Starbucks gift card, prompting purchases while expanding cross-brand loyalty.
However, merchants need to remember the importance of marketing and communicating incentives clearly. Nearly half of consumers miss out on loyalty incentives simply because they are not aware of them. The best ways merchants can educate consumers on gift card promotions are through emails (61%), text messages (39%), and TV/radio commercials (37%).
Gifting predictions for 2025
Gift card sales and redemption options will continue to evolve in 2025, as will how merchants adapt to consumers’ digital preferences. Instant delivery and use will popularize digital gift card options even more, while personalized gifting will become the norm, whether through AI-designed cards, which pique 48% of consumers’ interest, or gift card combinations like wellness-entertainment pairings.
In addition, with 41% of consumers interested in gift cards made from recyclable materials, merchants will want to reconsider ways to meet consumers’ sustainability desires.
An evolving retail landscape is nothing new, and merchants staying ahead of shifting gift card patterns can meet consumer expectations while creating stronger, lasting connections that lead to increased loyalty and success.
Click here to see more findings from the 22nd Annual Prepaid Consumer Insights Survey from Fiserv.
