Social norms stopping digital gift cards from reaching full potential

The study by West Virginia University has been published in the peer-reviewed academic journal, Psychology and Marketing.

“These studies looked at the psychology involved in giving and receiving gift cards. Across the board, they showed that givers are less likely to choose digital – as opposed to physical – gift cards than recipients are to prefer to receive them. This asymmetry occurs partly because givers overestimate the extent to which recipients see digital gift cards as violating the social norms of gift-giving,” explains gifting expert Julian Givi, an Assistant Professor of Marketing at the university.

“Givers may worry that digital gift cards won’t be seen as thoughtful. Whereas physical gift cards require a giver to go to a store and purchase the gift card, digital gift cards require only a minimal amount of time and effort, as the giver can quickly obtain one online.”

He continues: “And a digital gift card is more likely to imply that the giver waited until the last minute to purchase a gift. This is all inconsistent with what we think about when it comes to gift-giving norms.”

Easy to use and hard to lose

However, while givers often feel that “physical gift cards are superior in terms of desirability,” recipients are likely to see digital gift cards as “superior in terms of feasibility,” Givi said. “They’re easier to use and harder to lose.”

Indeed, his data demonstrate that when givers consider how they themselves would feel about receiving a digital gift card as a present, they’re more likely to give a digital gift card to someone else.

One study that moved the needle on givers’ openness to considering digital gift cards involved participants imagining giving a digital gift card as a gift for a birthday that was identified as happening during ‘National Digital Gifting Month’.

The researchers invented that event as an analogue to Cyber Monday, but Givi said the results showed that “givers were more likely to opt for digital gift cards when there was an occasion that altered their perceptions of gifting norms”.

That discovery offers retailers options for pushing digital gift card sales through occasion-based promotions, and Givi said he’d advise marketers “to promote their digital gift cards in ways that reduce givers’ concerns about norm violations – for example, by indicating that digital gift cards are becoming more popular and thus more in line with gifting conventions”.

Despite giver anxieties, digital gift cards are increasing in popularity – the global market grew approximately 15% from 2015 to 2020, when it reached US$258-billion. With similar growth expected over the next decade, the digital gift card market is projected to reach more than a trillion dollars by 2030.

You can find out more about the research here.