There’s no gift that says, “It’s the thought that counts,” quite like a gift card. The last-minute choice of harried shoppers and slackers alike, the gift card has taken on prominence in recent years as a particularly profitable offering for retailers during the holiday shopping season. Whether or not customers redeem the funds on the cards, merchants can still cash in on activation and processing fees.
However, a recent study conducted by Bankrate showed that millennials, the next crop of gift card buyers and users, have had a hard time keeping their prepaid cards secured as of late.
In a review of the use of gift cards in 60 different verticals, Bankrate found that merchants and issuers have implemented a high level of security measures — 50 percent now come with security codes, and 72 percent have some type of loss or fraud protection built in. However, this hasn’t stopped nearly 40 percent of millennials from misplacing or losing a gift card before spending its entire balance. Claes Bell, an analyst at Bankrate, said that this can present a particular threat to retailers in the age of widespread cybercrime.
“With so many recent data breaches and the transition to EMV chip credit cards, security is top of mind for many Americans,” Bell said in a statement. “Retailers are taking note and have made gift cards a much safer way to spend money.”
Just what have retailers done to mitigate this spate of millennial forgetfulness? The survey points to a rise in electronic gift cards as one possible solution. Though 59 percent of gift cards issued in 2014 were available through digital platforms as well, the Bankrate survey found that nearly 67 percent of 2015’s offerings can be accessed through smartphones and other mobile apps.
The organizational habits of millennials are far from the only thing guiding their opinions on gift cards. In an age of almost universal availability, Bankrate also found that millennials prefer general use gift cards as opposed to ones eligible for redemption at specific retailers or brands. Only consumers 65 years and older showed any kind of preference toward the more restrictive breed of gift cards.
Despite recipients’ feelings on gift cards, it’s clear that gift givers in Bankrate’s survey have no qualms about wrapping them up and stuffing them down a stocking — 76 percent of Americans have given gift cards, with the most common amounts across all economic levels totaling between $25 and $50.
While everyone wants to get gift cards with higher dollar amounts, Nathan Sweet, vice president of operations at digital rewards tracker MyPoints.com, told The Philadelphia Inquirer that the name of the game this year — and for millennial-dominated years to come — is customization and personal appeal in gift cards.
“We want to make it more personal — a nice, digital experience so it appears someone gave it some thought,” Sweet said. “We are expanding that idea and allowing him or her to swap a gift card with a different [retail] brand. Ultimately, when the holiday shopping season begins, what consumers are really looking for is choice.”
If buyers first gravitated toward the gift card as a matter of convenience, recipients are trending toward that as well. And while some unscrupulous retailers may think that failing to integrate next-level personalization and digital access to their gift card experiences will frustrate some millennial shoppers into leaving leftover balances unspent, time could just as easily lead the gift givers elsewhere in search of a more consumer-friendly approach that takes into account millennials’ digital preferences and occasional forgetfulness.