Why do so many shoppers buy gift cards over the holidays?

If you’ve noticed gift cards popping up everywhere this holiday season, you’re onto something. According to a recent study by WalletHub some 41% of people report wanting a gift card for Christmas.

And retailers are answering in a big way. From the super popular Amazon card to grocers like Costco, brands of varying size and industry-type are offering gift cards as an alternative to tangible gift giving.

But why the consumer demand? They’re just cash replacements, right? Well, not quite.

Here are a few reasons why so many shoppers are favoring gift cards instead of old-fashioned dollar bills this holiday season.

Gift cards say, ‘hey, I get you’.

The holidays put enormous pressure on shoppers to find a present that shows they really know their recipient. The trouble is, finding a gift that measures up isn’t always so easy.

This is a major reason why gift cards soar in popularity over the holidays. Flexible, yet representative of a brand the recipient loves, gift cards offer shoppers a personal way to show someone they care without forcing a specific purchase and perhaps ill-fitting on them. They allow your customers to say, “hey, I know you like this company, now go buy exactly what you want.”

The death of cash and rise of the digital-first Millennial.

Ok, cash isn’t quite dead, but more and more of the world is shifting towards a digital-first state—with a record-breaking $726 billion in digital payments expected by 2020. A few key factors are driving this trend. The first being the quick advance of digital payment technologies such as contactless bank cards, wearables, and virtual payment cards like digital gift cards.

The second being the maturation of the Millennial set. As the largest generation in history, Millennials grew up in a time of major economic upheaval and rapid technological change.

Now as adults, they rely on their smartphones and other digital devices to help them interact with the world. And this applies to how they buy. Payment options that allow them to buy on-the-go via their devices, and free of extra cards, are their preference. Think options like mobile wallets and digital gift cards to name a few.

Last-minute shopping is cliche (because it’s true).

Despite the best of intentions, many consumers are last-minute holiday gift shoppers. In fact, according to the National Retail Federation, some 40% of holiday shopping is done in the last 10 days before Christmas.

Why all the tardiness? According to another study by digital marketplace RetailMeNot, shoppers delay either because they don’t know what to buy (44%) or were too busy to buy ahead of time (30%). For these shoppers, digital gift cards offer the perfect cure—they make giving without having to commit to one item a possibility and can be purchased at the touch of a button.

Brand love is share-worthy.

For many of us, when we love something we want to tell the world about it. We tell our friends, we tell our co-workers, heck, some of us even tell Oprah (side note: how has that been over 10 years ago). And the same goes for the brands we love. When brands give us their best, we’re likely to fall in love and want to share the great experience with our urban tribemates.

Yet another reason why people love giving digital gift cards over the holidays—it allows them to share the brands they love with those they love.


Finally, the popularity of gift cards isn’t just limited to the holidays. In fact, gift cards are expected to continue climbing as a popular gift for other special occasions outside of the holidays (like birthdays and engagements).

Looking ahead, for any e-commerce retailer debating the merits of the gift card, just remember, it’s what your shoppers want.