How Gift Cards Have Evolved

The evolution of gift cards is fascinating to me. Sure, I may be biased since I’m in the gifting space. But it’s amazing to see the transformation throughout the years from paper to plastic and beyond.

From Gift Certificates To Gift Cards

We’ve had gift cards for so long that sometimes we forget its predecessor…the gift certificate. Major department stores first created gift certificates in the 1930s. But they weren’t well-known or accessible to all. These paper credits were hidden behind counters and only available to select consumers by the associates.

Gift certificates eventually became a household name in the 1970s with the launch of McDonald’s Christmas gift certificate program. Due to the popularity of McDonald’s program, other restaurants, retailers and shops started offering gift certificates to consumers.

All good things must come to an end. Gift certificates eventually became a problem for companies. Time spent on issuing and redeeming paper certificates was tedious for employees. But that wasn’t the only setback; counterfeit gift certificates came into play with the invention of color copies. This type of fraudulent activity resulted in lost revenue for the retailers. It wasn’t long until a new product entered the market to combat the issue; by the mid 1990s, gift cards were introduced.

The Invention Of Gift Cards

Gift cards were first created by Neiman Marcus according to Smithsonian Magazine. Although the well-known department store was first to market with gift cards, Blockbuster was first to display plastic gift cards in their store. Soon after, the gift card industry took off.

The Popularity Of The Visa Gift Card

While merchant gift cards Starbucks, Best Buy, Target, etc are popular, they can be somewhat limiting since they only allow redemption for that specific store. The introduction of Visa gift cards brought the ability for use anywhere Visa is accepted. It also provided incentive opportunities for large companies to reward customers and employees.

The Problem With Gift Cards

More than $130 billion is spent per year with nearly $1 billion unused according to CEB TowerGroup. Where does all that unused money go if it’s not being spent by the consumer? Believe it or not, the merchant ends up benefiting from unused cards. Isn’t that frustrating?

What’s After Gift Cards

Will plastic gift cards be a thing of the past? Eventually. With the introduction of electronic cards and gifting platforms like GiftYa, I believe plastic gift cards will be eliminated. Gifting itself is evolving; giving experiences, instead of a tangible gift, are the latest trend. For example, sharing a trip to the museum, golf course or favorite restaurant is more valued than a tangible gift you unwrap.