by Alex Palmer | May 14, 2018
The incentive industry has seen continuing growth in interest around digital and mobile gift cards from recipients, but new research indicates that planners should not count out physical gift cards. New findings from National Gift Card show that three out of four incentive recipients still redeem their loyalty points for physical gift cards.

The findings, reported in the annual "B2B Gift Card Report," drew from data on gift card purchases and redemptions made by NGC's thousands of corporate clients that use its loyalty and incentive services, connecting with more than 500 physical and digital brands in 2017. While redemption of points for physical gift cards decreased 3 percent compared to 2016, 75 percent of the volume in gift card program redemptions is still in physical cards, while just 25 percent is for digital gift cards.

The top physical gift or reward cards by NGC clients for 2017, by load volume, were Visa, followed by Amazon, Walmart, iTunes, and American Express. By quantity, the top redeemers were Amazon, iTunes, Walmart, Starbucks, and Target.

By category, big box retailers (led by Amazon) proved the biggest redeemers, with 26.8 percent of the total volume in gift card programs. This is followed by open-loop cards such as Visa and MasterCard (21.8 percent) and entertainment cards (17.4 percent), with iTunes making up the bulk of that category. The share of redemptions drops significantly from there, with department stores responsible for 6.8 percent of the volume, followed by quick-service restaurants (5.1 percent), gas/automotive (5 percent), casual dining (4.4 percent), and home improvement (3.8 percent). 

"The agencies and corporations looking for a best in class gift card provider stress four similar requirements that affect their ability to run successful programs," said NGC President Eric Thiegs, who emphasized that the data pointed to the importance of brand choice, delivery method, quality and security, and speed. "In an age when automation, security, and program choice/flexibility are requirements, you've got to stay ahead of the trends to ensure you're prepared to meet today's consumer expectations."

The full report is available at National Gift Card's website.