Gift cards quickly became a way for businesses to stay afloat during the early days of COVID-19. Throughout the pandemic, gift cards generated a greater portion of a merchant’s overall income than the prior year. According to studies, 2.63% of a merchant’s total revenue came from digital gift card sales in July 2020. That’s more than double the previous year — 1.17% in July 2019.

But as the days turned into months, and months turned into years, it has become clear that gift cards are now a primary way to increase sales and generate revenue. An intentional strategy for designing and promoting your gift cards can make a significant difference on your bottom line. As we look back at how the pandemic impacted the gift card industry, it’s important to recognize how it will continue to shape the way businesses engage customers in the future. 

4 Lessons We Learned from the Pandemic About Gift Card Sales

As we begin to bounce back from the pandemic, we wanted to reflect on what we learned about gift cards during that period. Here are three specific takeaways that will continue to impact the way businesses leverage gift cards to increase sales and generate revenue: 

1.The pandemic accelerated the growing importance of digital gift cards. 

E-commerce skyrocketed at the onset of pandemic restrictions. This makes sense as online shopping falls under the safe category of “at-home entertainment.” Gift card sales grew exponentially alongside the e-commerce boom. In 2021, digital card sales were the highest they’ve been in recent years.

While many businesses relied on digital gift cards to increase sales during the pandemic, the trend toward online gift card adoption isn’t slowing down anytime soon. In fact, digital gift card adoption is expected to increase by 23% by 2025.

2.Gift cards provide an effective way to overcome seasons of economic uncertainty.

During the pandemic, gift cards proved invaluable to businesses, especially restaurants. Gift cards served as a sort of “micro-loan” for businesses by providing immediate cash flow without having to provide immediate service. At the same time, many restaurants promoted incentives for customers to purchase gift cards with a higher amount for a slight discount. 

What was initiated as a strategy to stay afloat became a proven way for businesses to leverage gift cards to navigate challenging economic times.

3.The pandemic highlighted the need to effectively promote gift cards. 

Email and social media campaigns also proved crucial to keeping restaurants alive, especially at the local level. Many small businesses chose to turn to extended merchandise (i.e. mugs and apparel) to boost brand awareness while also offering loyal customers the opportunity to lend their support by purchasing digital gift cards—even if they were still uncomfortable with the prospect of eating takeout.

4.Gift cards have become one of the most popular ways to show people you care. 

Throughout the pandemic, gift cards became a basic way to show distant loved ones that their physical presence was missed. Online gift cards reminded friends and family that they were loved. As a result, online gift card sales skyrocketed. In fact, 33% of consumers said online gift cards enabled them to still celebrate holidays at a time when in-person social interaction was limited. Even as restrictions ease, gift cards still provide a personal way to show people you care about them

Moving Forward: Maximizing Gift Cards for Long-Term Success

As we transition away from the pandemic, it’s important to recognize the lessons we learned over the past two years. Gift cards are no longer just a secondary strategy to passively offer customers. They can make a valuable difference to your bottom line. If you’re looking for a way to accelerate gift card sales, our team at Card Market can help. Contact us today to schedule a consultation!