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Electronic gift cards gaining popularity, especially among millennials

Fifty-nine percent of gift cards are now offered electronically, up 18 percentage points from 2010.

November 5, 2014

Fifty-nine percent of gift cards are now offered electronically, up 18 percentage points from 2010, according to a new Bankrate.com report. This is good news for millennials, since they’re more than twice as likely to lose traditional plastic gift cards than older adults.

Forty percent of 18-29 year-olds admit to losing a gift card. Electronic gift cards can be accessed through mobile apps and email applications; they are much harder to lose than traditional plastic cards. Mobile gift card usage among millennials is double that of older adults.

“There are lots of reasons why electronic gift cards appeal to customers,” said Jeanine Skowronski, Bankrate.com credit card analyst. “For starters, they're a quick fix for anyone who needs a gift on the fly. Second, unlike their plastic counterparts, they don't take up excess real estate in your wallet. And, though it may seem counterintuitive, a digital gift card can be easily personalized.”

While various age groups disagree on traditional versus electronic gift card usage, millennials, Generation X and boomers all prefer general-purpose gift cards over cards that must be used at a particular store. Unfortunately, general-purpose cards charge higher fees.

All seven of the widely-held general-purpose cards that Bankrate surveyed charge purchase fees ranging from $3.95 to $6.95, whereas only 7 percent of store-specific cards charge purchase fees.

Eighty-four percent of Americans have received a gift card and 72 percent have given one. The most common value is between $25 and $50.