by Andrea Doyle | November 20, 2014
Fifty-nine percent of gift cards are now offered electronically, up 18 percent from 2010, according to a new report. This is good news for Millennials, since they're more than twice as likely to lose traditional plastic gift cards than older adults.

"Digital gift cards are rapidly disrupting the $130-billion gift card market," says Ben Kaplan, president and CEO of CashStar, a digital gifting company. "The popularity of digital gift cards also extends into the B2B space. The benefits remain the same. We provide retailers with a rich e-commerce experience for their business clients, including the flexibility to personalize the experience of bulk ordering of B2B gift cards."

Electronic or digital gift cards delivered via email or text incorporating an award code offer instant gratification -- making them extremely popular in this always-connected world.

The Incentive Gift Card Council reports that the top 10 most popular closed-loop gift cards are food-and-beverage cards, followed by those for department stores, exclusive online retailers, music and movies, fuel, electronics, sporting goods, apparel shops, travel, and jewelry and accessories.

In a typical incentive/loyalty environment, fulfilling a plastic gift card can take anywhere from three days to three weeks. With a digital gift card, the recipient receives it instantly. Incentive managers can send them without having to worry about the costs involved with physical cards such as postage and inventory. Now that the majority of shoppers carry their smartphones everywhere they go, they can use a digital card with ease, without worrying if they left their plastic gift card at home.

The future is bright for digital gift cards. "Mobile payments, including the mobile wallet, will have a massive -- and positive -- impact on the digital gifting space," says Kaplan. "It's definitely an exciting time in the digital gifting space."

Digital gift cards are particularly effective when used as health incentives -- as rewards for employees who participate in wellness programs. Rewards should be given as soon as possible after an action or behavior that is being reinforced. Studies show that if the person receives the reward immediately, the impact is greater. If one waits too long to incentivize, the effect decreases as the delay lengthens.

"While this concept applies to all engagement program types, I feel it's especially important in wellness programs and is often the difference between the success and failure of a program," explains Melanie Miller-Pusateri, senior vice president of Frosch Rewards & Incentives. Frosch offers an electronically delivered Wellness Rewards eCard solution that is growing in popularity.

"Rewarding wellness program participants soon after the desired performance reinforces the behavior. When clients wait too long, I'm afraid the employees lose the correlation between their actions and the incentive, and the opportunity for bolstering the desired behavior has been lost," she says.

Frosch's electronically delivered gift cards allow organizations to reward their wellness program participants as soon as the desired behavior occurs so they associate positive meaning to the behavior or action. The card drops into the participant's email inbox and can be used to pick a reward of choice online from thousands of wellness- and fitness-focused selections.