Several key trends will influence the future of gift cards. These trends include the declining use of cash and digital payments. The fastest-growing segment is likely to be digital gift cards. Supply chain issues and security concerns will limit the growth of this market. Nonetheless, digital gift cards will provide retailers a valuable opportunity to serve customers.

Digital Gift Cards

By 2020, digital gift cards will be the fastest-growing segment of the gift card market. The market is expected to grow fastest in North America, with more than two-fifths coming from this region. The growth of the corporate gifting culture and the new trend of using e-gift vouchers as employee incentives will help boost this market. In addition, the rapid growth of the internet and high disposable income in Asia is expected to drive growth in this region.

Smartphone penetration will help increase the growth of the gift card market, as smartphones offer convenient payment options. For example, a smartphone application such as Gyft allows consumers to load their gift card with cash and then spend it in the store. This unmet need is fueling the expansion of the digital gift card market.

As digital gift cards become more popular, more businesses will accept them. This will spur digital gift card adoption and provide an additional revenue source for companies. However, consumers need to be cautious when using gift cards. A gift card scam can lead to a significant loss for a consumer. Americans have already lost $245 million due to fraudulent gift cards since 2018.

Supply Chain Problems Affect the Growth of the Market

The gift card industry, like Gift Cards Chatsworth CA faces some unique challenges in the current economic climate. The global supply chain is in turmoil, and problems are expected to continue next year. As a result, consumers may find it challenging to purchase gifts during the holiday shopping season. On the other hand, this shortage of products may cause them to buy gift cards in record numbers.

The report includes an analysis of the current and future competitive landscape and discusses manufacturers’ key challenges and risks. It also examines the different segments of the market, their sizes and development potential, and the impact of other policies on the market. Further, it describes the various downstream markets and their role in the market’s growth.

While there is a moderate threat of new entrants and substitutes, the competitive rivalry among industry leaders is highly intense. Global players such as Target, Amazon Inc., Starbucks, and other retail giants are boosting their presence internationally.

Security Concerns Concerning Digital Gift Cards

While the convenience of digital gift cards makes them a popular payment method, they are not without security concerns. Digital gift card theft, especially during the holidays, can cause significant damage to customer trust and revenues. It also puts a heavy financial burden on businesses. In addition to the time and money spent fixing security vulnerabilities, companies also must devote time to contacting affected customers and arranging to make them whole. Furthermore, marketing teams need to mount efforts to counter bad press.

Fortunately, there are several measures retailers can take to minimize the risk of fraud. First, physical gift cards should be checked before being used. Look for signs of tampering, such as the PIN. Scammers can copy a gift card’s code as it sits on a rack. Some issuers will replace lost gift cards with proof of purchase or the card’s ID number, which can help prevent card fraud.

Second, merchants must implement robust information security technology to protect against fraud. In addition to tracking gift card purchases, merchants must be vigilant for suspicious activity and check payment sources. They should also ensure all employees with access to their systems and computers receive cybersecurity training. If necessary, they can run simulated phishing emails, and social engineering attempts to determine weak points and vulnerabilities in their systems and procedures.