Gift cards represent an estimated $100 billion global market, and the digital gifting segment seems poised to move the market beyond plastic. According to CashStar Inc.'s 2011 Holiday Online Shopper Gift Card Survey, the mobile channel for holiday e-gifting is growing as smart phone users increasingly enjoy the convenience, immediacy and variety afforded by the digital gifting experience.
Over a quarter of 1,439 respondents polled in the CashStar-sponsored survey (conducted in November 2011 by online research firm Zoomerang) intend to use smart phones for holiday shopping. Additionally, 30 percent of respondents who own smart phones would purchase e-gift cards, up from 20 percent who took part in the survey last year.
These analytics are evidence of what CashStar co-founder and Chief Executive Officer David Stone called the coming of the "post plastic card era." It is CashStar's mission to convert plastic gift card buyers into digital gifting consumers by showcasing the benefits of the online and mobile gift giving options. The way CashStar is converting consumers into believers is through personalization.
"People love and hate their [plastic] gift cards; regardless, it's the most given gift in the world," Stone said. "People don't like them because they don't feel very personal. So we're changing the game, making it very personal."
On the websites of over 200 brand retailers, including Best Buy Co., The Home Depot U.S.A. Inc. and Williams-Sonoma Inc., CashStar has integrated its digital gifting platform, which allows consumers to embed images, messages and now video to digital gift cards. Consumers can also pre-buy e-gift cards and have them delivered to recipients on a given date.
Stone estimated transactions conducted over CashStar's network are more than doubling yearly, with the mobile channel growing at 6,000 percent – a percentage reflecting mobile gifting's still small user base. Delivering digital gift cards via email is still the dominant vehicle, where the magnetic stripe on plastic cards are turned into bar codes that can be printed out and scanned at the physical POS, he said.
But the future is mobile, according to Stone. Consumers don't have to be tied to PCs and print out e-gift cards, he said; instead, a person can arrive late to a Christmas party without a gift in hand and send an e-gift card via a smart phone almost instantaneously.
One metric that has retailers hearing Christmas bells is, as Stone put it, "They [e-gifters] spend a lot of money online." In fact, Stone has found that e-gift card buyers typically load 50 to 150 percent more value on digital cards than on plastic ones.
CashStar's 2011 Holiday Online Shopper Gift Card Survey is free for download at www.cashstar.com/egift-card-resource-center/. 
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