by Deanna Ting | November 29, 2013
A September 2013 study conducted by Retail Systems Research has made this much clear: Digital gifting is here to stay, but there are vast improvements that need to be made. The report, “Digital Gift Cards: The Good, The Bad, And The Ugly,” says that more retailers and digital gift card providers need to streamline the digital gifting process, making it more secure, easy-to-use, and more personalized than it is currently. 

E-gifting challenges were also a topic of conversation in this year’s annual Incentive Industry Roundtable, as well. “Digital gift cards are becoming pervasive,” says Ian O’Brien, president and CEO of “The big roadblock is in-store redemption — you have digital gift cards out there but they can only be used on the website. That’s not necessarily an appealing incentive … Ultimately, gift cards aren’t going to be pieces of plastic. It’s going to be a code you get.”
Why Digital?
“I think we’re still in the early stages of adoption for digital gift cards,” says Leif Baradoy, president and CEO of Kiind, a new desktop and mobile service that allows people and businesses send digital gift cards via email without having to pre pay; with Kiind, gift card givers only pay for the digital gift card once the recipient decides to use it. “Industry trends show that digital gift cards are exponentially on the rise because of mobile wallets and I think that by 2017 or 2018, a very sizeable part of he overall gift card market will be digital.”

Jonathan McClellan, director of employee recognition at Hallmark Business Connections, also sees more organizations adopting digital gift cards as part of their workforce reward and recognition programs. “As more companies become more diverse and workforces become more remote and flexible in terms of where, when, and how you work, digital engagement will play a much more dominant role in how companies approach employee engagement and recognition strategies,” McClellan says. “The trend is moving toward of an immediate, digital exchange, but the question becomes, ‘How do you still maintain the integrity of the recognition and the message so it’s still genuine and authentic, but also take advantage of technology?’”

How to Make It Better
Both McClellan and Baradoy believe that the key to making the digital gifting experience better is to add elements that allow for customization, personalization, and visible recognition. “It would be shortsighted if people just through a gift card itself amounted to recognition,” says McClellan. “That’s just part of it. What really drives and changes behaviors, increases engagement, and solidifies loyalty, is connecting the message to behavior,” he explains. He suggests organizations use printable certificates along with digital gift cards, or adopt animated gift cards, digital cards that include personalized messages, or even physical gifts that can be redeemed digitally. 

Baradoy also notes that giving digital gift cards is an opportunity for organizations to track the likes, dislikes, and preferences of their recipients, as well as to spark engagement. He explains that with Kiind, for instance, gift card recipients can choose from a variety of gift card options from different brand and retailers, and those chosen are tracked. “It’s a more personalized experience that way,” he explains. He also notes that the gift card giver is notified when the recipient actually uses the gift card, making it easier for the giver to engage with the recipient. “You get notified when the gift is claimed or used, so you can follow up with the recipient directly to confirm that the gift was appreciated and fulfilling.”

With Kiind and other digital gifting providers such as CashStar and Transaction Wireless, the opportunities for digital gifting continue to change. Adds McClellan, “With the digital space evolving so quickly, there are so many new opportunities for the message to be conveyed, and for recognition and rewards to be given to motivate.”