Gift Cards: Not Just For Merchant Apps Or The Holidays

In-Chat Gift Card Purchases

Merchants may be able to deliver the best experiences to their customers through their own apps, but not all customers want to take up hundreds of megabytes on their phones — unless they really love the brand. As a result, merchants need to find another way to interact with consumers and reach them on the platforms they already use.

“Consumers are expecting you to go where they are,” Gerry Gilbert, VP of Product at Blackhawk, which recently acquired CashStar, told in an interview. “So, fundamentally there’s been a shift in what consumers expect. And, to some degree, that’s what’s going to drive everything.” To stay on trend, retailers and merchants can turn to existing apps like Facebook Messenger or Apple’s iMessage to drive sales.

But don’t be fooled: The experience doesn’t feel like contextual marketing.

“If you’re to go to iMessage and experiment with the ability to purchase a gift card of either Dunkin’ Donuts or Starbucks in the apps, those feel more native because it’s not actually contextual commerce at that point,” Gilbert said.

Gift Card Popularity

Even without technology that promotes gift cards, the simple fact of retail is that consumers already enjoy receiving gift cards — especially around the holidays. “Consumers want gift cards,” Gilbert said. “Bar none, it’s one of their favorite gifts,” other than maybe cash, he added.

In fact, gift cards have been the most requested holiday gift by consumers for the past 11 years, according to a National Retail Foundation report. And that popularity may only grow: Gartner projects that the gift card market could reach $160 billion in 2018, giving merchants an extra incentive to set higher goals for their gift card programs.

For merchants facing challenges with customer traffic and sales, gift cards can serve as an accessible and affordable strategy to drive sales. But merchants who don’t adapt their gifting strategies to meet this market could risk losing valuable holiday sales to their competitors.

Everyday Occasions

Gift cards don’t have to just come on holidays, and technology can help suggest gift cards to consumers for everyday occasions. For example, a plugin to a messaging app could come into play if a consumer is chatting with a friend online who has had a bad day. To cheer up that friend, the plugin might learn from the exchange and suggest sending a gift card to Starbucks for a coffee or Uber for a ride to visit. Such prompts take an everyday chat into an opportunity for a sale.

“It’s taking that contextual commerce and saying, ‘How do I convert this conversation, which has nothing to do with commerce, into something that actually might deliver an eCommerce output?’” Gilbert said.

In another case, a potential gift card customer might learn from a message that a friend is feeling chilly. He or she could buy the friend a sweater, but the purchase process is not easy. The consumer has to pick out a color and have it shipped, after all. But a gift card purchase makes the gift-giving process easier: All the consumer has to do is give his or her friend a gift card to a retailer like Nordstrom, so they can buy a sweater. “Those things are much more immediate, and, to some degree, they’re less tricky,” Gilbert said.

Consumer Adaptation

While technology such as chatbots — and messaging plugins — may seem rudimentary today, they’re going to get more advanced in the near-term future. And while there’s going to be some quirkiness and a big brother-like feeling for consumers now, they may discover value in sharing their browsing history with brands. As a result, they may be willing to give up some of their privacy to discover something new.

This consumer adaptation process has played out before with new business strategies like targeted marketing. At first, consumers would search for a term on Google only to see targeted ads on Facebook and wonder how Facebook knew their search history. But that feature did not stop consumers from using Facebook.

And, with auto correct, consumers use to have crazy stories about the weird off-topic suggestions that auto correct would make. But that technology is not inserting crazy words in their text messages anymore.

So, as messenger chatbots mature, too, they will become mainstream and consumers will come to see their value. Whether it’s an employer wanting to reward an employee for a job well done or a husband who wants to send his wife a card with a gift certificate, chatbots — and plugins — will give merchants an immediate way to deliver value to consumers.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.