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Revenue from gift card sales has seen a four percent increase compared to last year. In 2023, the sales of digital gift cards surged by 7%, constituting 34% of the overall gift card market, thus becoming the fastest-growing segment in this category.
These insights were revealed in the 2024 Paytronix Gift Card Trend Report.
“Innovative restaurants are adopting digital gift cards, enabling smooth processes for purchasing, sending, redeeming, and reloading through mobile applications and websites,” noted Lee Barnes, Chief Data Officer of Paytronix, in the report’s press release. “Our latest findings aim to educate brands on how treating gift cards as more than just a sales tool can help them broaden their reach, engage their supporters, foster customer loyalty, and deliver tailored experiences that encourage guests to return.”
The integration of mobile gift cards with a restaurant’s current app, loyalty programs, and online ordering systems creates a cohesive digital environment that enhances customer experiences and keeps their preferred venues easily accessible.
Mobile gift cards work smoothly with popular digital wallets such as Apple Pay and Google Pay, making it convenient for guests to store and use their cards for online transactions and in-store purchases through NFC or QR code scans. Adopting a mobile-first strategy for gift cards also yields important insights into customer habits and preferences, which can be leveraged to craft personalized promotions, optimize loyalty programs, and inform strategic business decisions.
Additional insights from the report
Digital gift cards are redeemed at a rate twice as fast as their physical counterparts. On average, online gift cards are redeemed within 16.8 days, while those bought in-store take around 35.3 days.
Gift card sales continue to thrive, with 2023 experiencing a six percent revenue growth over 2022. Digital gift cards were the standout performers, with sales surging by 229% from 2019 to 2023. Full-service restaurants (FSRs) also recorded a one percent increase in gift card sales, rising from 2,259,621 in 2022 to 2,342,083 in 2023.
The most favored denomination remains the $25 card, representing 34% of all cards sold in 2023. However, $50 cards experienced the greatest sales increase, jumping by 17%.
There was a five percent rise in holiday gift card sales year-over-year, with 80% of all physical gift cards—whether purchased in-store or from third-party vendors—sold in November and December.
The data for the 2024 Paytronix Gift Card Report was compiled from gift card sales data of 241 merchants between January 1, 2019, and December 31, 2023. Each merchant had at least six months of gift card sales information starting from July 2018.
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