In my previous blog , I had highlighted various mobile payment options and their importance in retail industry. Another payment method which has recently gone mobile is gift card. Thanks to the growing popularity of doing everything we possibly can on smartphones, the shift from plastic gift cards to smartphones is inevitable, as the industry tries to keep up with consumer demand and preferences. Mobile gift cards are the newest innovation in gift cards for retail industry. Instead of using plastic gift cards, consumers are allowed to store their gift card numbers on their cellphones and smartphones and then redeem their gift card by presenting the stored information on their phone at checkout.
Typically, mobile gift cards are sent via email, Facebook or text. The recipient is notified that he has a gift card, and can take his smartphone into the store and use it immediately. The store clerk simply scans a bar code from the recipient's phone, and the card is applied to the balance. The mobile gift cards offer benefits to both retailers and customers alike.
The most important benefit from customer's point of view is the ability to store all gift cards at one place. No need to carry around physical gift cards. Your wallet is dropping inches by the moment.
Gift cards that are lost, unused and/or partially redeemed will be a thing of the past. Mobile gift cards are always with you on your cell phone. No more tossing the gift cards in a drawer and forgetting about them. Furthermore, mobile gift cards could solve the problem for lost gift cards. If the physical gift card is lost, it's gone. But with mobile gift cards, because data is saved to the cloud, even if the phone is lost, the user could manage cards using an online portal on a browser.
Convenience & accessibility - Because you always have your mobile phone with you, mobile gift cards are always with you. It's kind of the new 'don't leave home without it.'
Personalization perks - One of the biggest disadvantages of physical gift cards is inability of gift card senders to personalize it to make it more beautiful. This issue is addressed in mobile gift cards to a large extent. Mobile gift cards allow the purchaser to add things like their own text message, their own picture into the mobile gift cards. Sender can also include an audio message or even a video message.
From retailers' perspective, there are definitely some benefits to storing all gift cards on an app. For one, in the long term, it might be cheaper, as there is an only upfront cost of developing and deploying the app rather than producing plastic cards for years. There's a green angle in it as well. Mobile gift cards also help to reduce gift card fraud, thus reducing write-off expenses.
While gift cards are handy for people who need a quick idea, retailers also benefit from the cards. Generally, recipients who do redeem them end up spending more than the value of the card itself, meaning retailers generally get a profit when people redeem their gifts.
Given, all of above advantages, it is quite likely that mobile gift cards would replace physical plastic gift cards sooner than later.