Are gift cards still needed in 2021?

As online retail continues to boom and sustainability moves to the forefront of consumers mind are traditional gift cards still necessary in this day and age. Retail Gazette speaks to experts to find out.

As online retail continues to boom and sustainability moves to the forefront of consumers mind are traditional gift cards still necessary in this day and age.
“Gift cards give the recipient time to decide exactly what they would like" - Lucille Whiting

The gift card sector’s humble beginnings can be traced back to 1932, when the first book token was issued. Since then, it has transformed into a £7 billion industry in the UK, and plays a pivotal role in the retail sector.

With the boom of online retail, gift cards can now be spent and topped up online as well as redeemed in stores. But there are some downsides: from the use of plastic to most of them expiring after two years.

A survey conducted by Consumer Reports found that over 25 per cent of all gift cards given are never used. While that might seem high, it still means that 75 per cent of gift cards are being used, signifying that gift cards are still a popular method of gift giving and payment.

Lucille Whiting, lead designer at Sophia Alexander Jewellery, said that for her business, gift cards are still crucial. She also said they would experience a significant drop in sales if they stopped offering them.

“My sales are split between people who buy keepsake gifts and people who buy memorial jewellery,” Whiting told Retail Gazette.

She explained that gift cards are usually bought by partners or parents buying on behalf of someone who has already expressed an interest in having something bespoke made.

For retailers that do make niche and highly personalised products, often clients won’t want to make those decisions on behalf of the recipient and will instead opt for gift cards.

“Gift cards give the recipient time to decide exactly what they would like,” Whiting added.


In recent years there have been concerns that gift cards are unsustainable due to being made out of plastic, with the introduction of alternatives such as discounts codes and e-cards. So does this mean traditional gift cards still necessary?

Joe Darwen, chief executive at Veo, said that there was still a lot to be said for the tactile nature of gifting.

“For example an e-greeting card may still not be as preferred by many as the real thing to wish your loved ones a happy birthday, anniversary, wedding day, new baby etc,” he said.

“So there could be a great opportunity for the eco-plastic compostable alternatives for gift cards.”

Darwen explained that unlike a debit or credit card they do not have to withstand 12 months of wear and tear being taken in and out of wallets and pockets, so there could still be room for traditional gift cards that were eco-friendly.

“However, due to the nature of a gift card being easily redeemed online or in a shop from a smartphone maybe they aren’t required in physical form,” he explained.

“They are not a greeting card, and anything that reduces our need for plastic is only a good thing.

“Plastic reduction is a huge consumer trend that will only continue to grow, so e-Gift Cards maybe are the future.”

When asked if there was a way that retailers can revive the use of gift cards, James Khoury, chief executive of Zendbox, the intelligent ecommerce fulfilment solution driven by AI said it was never dead in the first place.

“It just moved to a digital place with the usage of e-cards and e-vouchers,” he said.

He stated that it’s important that retailers stress the convenience angle in relation to using gift cards, both as a gift and even for personal use.

There’s also the hygiene aspect of an online e-gift card, an angle that many consumers are (even subconsciously) aware of and opting for.

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