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Digital Gift Cards Growing in Popularity

December 6, 2013

Loads on digital gift cards for November and December of 2013 are expected to total $1.3 billion and top last year's total by about a factor of four.

Loads on digital gift cards for November and December of 2013 are expected to total $1.3 billion and top last year’s total by about a factor of four, according to Mercator Advisory Group.

This year is expected to continue the trend of the Cyber Monday online shopping frenzy triggering the year’s biggest buying season for digital cards, partly due to the condensed holiday season between Cyber Monday and Christmas, says Transaction Wireless’ Tom Niedbalski. He partly credits merchant holiday promotions for his company seeing triple-digit increases in digital card sales on 2013’s Cyber Monday compared to last year. Niedbalski says digital cards currently make up about 60 percent of gift cards sold by clients in the business-to-consumer market.

Meanwhile, observers see such products becoming less seasonal, with Mercator analyst Ben Jackson pointing to the success of the Starbucks gift card as a driver of this phenomenon. In addition, many experts note that consumers are purchasing the cards as gifts to themselves, which Niedbalski says could be the result of cash offers and other promotions.

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