Digital vs. Physical Gift Cards: Which One Is Better? 

Have you ever wondered what the difference is between Digital and physical gift cards? Which one is more suitable for you? How to determine which one will provide more value in your case? 

Wonder no more; till the end of this article, you will find all your concerns addressed about this dilemma.  

In antiquity, something significant was written in stone, using simple terms to express love and respect.  

While modern gifting conforms to this trend, digital gifts have become prominent in personal and professional lives. 

Though physical gift cards have seen gradual growth, digital gift cards have grown rapidly to become the preferred choice. Rapid technology adaptation and straightforward redemption has contributed to the slow uptake of digital gift cards.  

Additionally, with the introduction of smartphones and an interconnected digital universe, these cards can now be received and redeemed on handsets almost anywhere and anytime.

This convenience factor has made digital gift cards alluring individuals and corporations alike, who enjoy their ease of use and immediacy. 

Let’s get straight into the detailed comparison of Digital Vs. Physical gift cards.  

Gift Cards Facts & Figures 

Choosing between physical and eGift cards is significant for both givers and receivers. Market trends show how changes in tastes could be captured with points of data in quantitative market research. 

With respect to market size for eGift cards, it was worth $405.17 billion in 2023 and would grow to $740.41 billion by 2027 and $1.5 trillion by 2032.  

All this growth is based on a CAGR of 16.3% during the major growth period: between 2023 and 2032.  

With some security issues that cannot be deterred, the hook that provides incremental new products will enable the market to be driven in continued growth.  

In 2022, the digital segment led the market, generating 60% of the total global eGift card revenue. 

Physical Vs. Digital Gift Cards: The Difference 

Before we delve deeper into the ins and outs of the contrasting factors of physical and digital gift cards, it is crucial to note that neither outshines the other. Both have their significant benefits, and the selection depends on your personal choice 

What is a Digital Gift Card? 

A digital gift card is an electronic, virtual, or mobile gift card that provides essentials for someone as a modern, efficient gift option.  

Unlike plastic gift cards, delivered electronically, they are sent via electronic means, usually in codes or reward-based links, directly to the recipient via email, SMS, or dedicated apps. 

Digital gift cards function just like any other gift card. Depending on the policies of the issuing company, recipients can use the code or the provided link to purchase goods online or in brick-and-mortar stores. 

They are flexible alternatives to cash and enable recipients the freedom to choose where and how they can redeem them.  

Digital gift cards or e-gift cards have become the trendy new-age alternative for a tech-savvy world. They can’t be lost, much safer, still you must be careful from gift cards theft. They are beneficial to modern lifestyles in many ways, such as: 

• Instant Gratification: The most important benefit of digital gift cards is quickness in delivery. They can be sent immediately by email or via text. Perfect for last-minute gifts or recipients on separate continents, this bypasses all delays of physical shipping 

• Convenience and Retrieval: Digital gift cards are electronically stored gift cards that can be accessed on demand from computers and/or mobile devices. Unlike tangible gift cards, digital gift cards can’t be lost or damaged, and once sent, they are kept secure in a wallet application or email inbox. 

• Flexibility: Customers can redeem a variety of gift cards either in-store or online. Smart recommendations should help customers find products they may not have considered otherwise. 

• Personalization and Customization: Digital gift cards can be personalized in various ways, such as by writing a custom note or choosing a specific design. While nothing is usually in them, this does add an almsgiving tinge to the offering and a mark of thoughtfulness. 

• Integration with Digital Platforms: Digital gift cards often integrate seamlessly with loyalty programs, rewards accounts, and digital wallets. The omnichannel solution improves the user experience by allowing recipients to redeem gifts across platforms easily. 

• Mobile-First Experience: Digital gift cards are conceived and developed with the latest technologies to provide a mobile-first experience. This fits perfectly with today’s recipients, who have increased reliance on smartphones for daily tasks.    

What is a Physical Gift Card? 

Physical gift cards have been around for many years, and many people have chosen them as their traditional choice. The tangible nature of the gift card lends it a sense of being a “real” gift. 

Unwrapping and receiving a physical card can generate excitement and anticipation, particularly if given in person. 

However, these physical gift cards come with their own limitations: 

• Delivery Challenges: Sending a physical gift card may take time and be overly complicated, particularly when time is of the essence and distance is involved. You have to wait for them to be mailed to you or turned over in person, and in some cases, that does not work out very well. 

• Risk of Loss: Physical cards can be misplaced, lost, or damaged quite easily. In general, it is quite hard to replace a physical card if it is lost; hence, it is worthless or a lost gift. 

• Limited Flexibility: Physical gift cards are often limited to specific retailers or locations. Cashing in a physical gift card can be cumbersome and typically does not readily transfer from offline to online. 

• Limited Customization: Although limited opportunities still exist for personalization when it comes to physical gift cards, they usually come up with a fixed design.  

Why Digital Gifts Are Better Than Physical Gifts? 

Here’s why digital gift cards are considered better than physical gift cards: 

Let’s discuss in detail: 

1. Enormous Scope for Personalization 

A crucial element in meaningful gifting is personalization. 

A personalized gift strikes a chord with recipients and evokes their emotional connection. It’s been reported: 

• 62% of Americans prefer gifts that feel personal and come from the heart. 
• 52% believe that personalized gifts show thoughtfulness on the part of the giver. 
• 58% are likely to share personalized gifts with others, and 55% tend to keep them longer. 

Digital gifting allows almost endless levels of personalization. With a digital gift card, the sender can choose the design, include personalized messages, and set custom amounts of value. 

2. Instant Gratification Across Geographical Barriers 

Digital gift cards can be delivered on the spot via SMS, e-mail, or specific apps. Hence, they give out the advantage of catering to recipients from different countries or continents in no time, avoiding unnecessary logistic challenges of shipping a physical gift. 

With a few clicks, recipients can redeem their digital gifts without stepping into a store or standing in a queue. 

Most digital gifting platforms serve multilingual preferences, making sure the message is correctly translated and culturally suitable. 

3. Cost-effective and High-impact 

Sending physical gifts to a number of employees or clients can set one back quite a bit in time, plus a pretty penny on the cost front.

The purchasing, storing, shipping, and return handling costs tend to pile up quickly. On the contrary, digital gifts remove most of these costs. 

Sending a digital gift is as simple as sharing a code or link, regardless of where the recipient is located. 

This cost-benefit is contributing to the more serious adoption of digital gift cards, which is expected to pass a 23% growth by 2025, outpacing total gift card sales.  

4. Ideal for Last-Minute Gifts 

Even with a well-planned gifting strategy, last-minute needs can crop up unawares. Digital gift cards could be a perfect solution in such dirty situations.  

Unlike traditional gift cards, which can take days to arrive, digital gift cards are delivered within a few minutes. Many platforms provide the extra advantage of scheduling, allowing you to plan and prevent any last-minute panic. 

One of the main downsides of a physical card is that it can easily be lost.  

A survey showed that 40% of 18 to 29-year-olds have misplaced a physical card to be used later.  

Digital gift card options take care of this worry since they arrive electronically and are thus recorded safely in their emails and digital wallets.  

Such certainty gives both the giver and the receiver peace of mind that the gift is always there to be used. 

These crowning advantages make digital gift platforms scale as per business needs immeasurably. Just in a few seconds and possible clicks, new gift categories and even other vendors can be added, which helps to react to changing trends and preferences.

This very flexibility ensures that your gifting strategy stays current and engaging for your employees and clients. 

5. Safety 

Digital gift cards are much safer than traditional ones. The information is generated only at the time of purchase, sent directly to the intended recipient, lowering the risk from many scams, like card skimming.  

6. Tracking 

Digital gift card transactions are typically tracked in real-time, meaning you can check usage and address discrepancies immediately. 

This transparency helps decrease fraud risks while giving both parties increased protection.  

7. Eco-Friendly Option 

In today’s world, which is getting increasingly conscious about the environment, digital gifts provide a greener alternative to physical gifts. Physical gift cards not only use up valuable resources like plastic and paper but also support deforestation and the growing waste troubles of pollution.  

Shipping physical gifts also generates carbon emissions, while the use of digital gifts exactly avoids this kind of waste in its entirety. Digital gift cards can be considered virtual, minimizing their carbon conception impact and promoting sustainability efforts. 

8. Seamless Integration with Digital Platforms 

Digital gift cards can seamlessly integrate into various digital platforms such as loyalty programs, rewards accounts, and digital wallets. Some gift cards, like Visa and Mastercard, work internationally on a lot of platforms. 

This omnichannel experience allows recipients to redeem their gifts flexibly in line with their lifestyles.  

Such incorporation deepens customer satisfaction, encouraging greater engagement by business customers and employees with the brand. 

9.Better Alignment with Modern Lifestyles 

These days, grantors are open to technological ways of living, wholly accustomed to innovation, and using smartphones and other devices for routine business. Digital gifts roundly align with today’s modern lifestyle of mobile-first-gifting access.  

Generational Preferences 

Here is a detailed breakdown of the generational preferences from the gift cards perspective: 

1. Baby Boomers (1946-1964) and Generation X (1965-1980) 

Baby Boomers and Gen X prefer traditional, tangible gifts that evoke nostalgia and sentimental value. They often see physical gifts as more thoughtful and appreciate the ritual of shopping and gift-wrapping. 

While Generation X is currently becoming more comfortable with digital options, they still favor presenting and receiving something they can hold and unwrap. 

Pragmatism also plays an essential factor, as Gen X values gifts that serve a useful purpose. 

2. Millennials (1981-1996) 

Millennials, as digital natives, value experiences over things and prefer gifts that evoke happy memories. 

They appreciate personalized gifts that signify thoughtfulness and are now becoming more inclined toward technology-influenced options for ease and green living. 

Millennials are tech-savvy and focus on time, so they are very okay purchasing gift cards, online subscriptions, and other gifts based on technology. 

Usually they spoil for choice when it comes to their gifts, it is a party of practicality with personalization and sustainability. 

3. Generation Z (1997-2012) 

Gen Z are the most digital and crave huge amounts of instant gratification, tending towards digital gift cards and online shopping. 

They want unique, personalized gifts that fit their identity. They are also socially conscious and prefer gifts that reflect ethical and environmental values. 

Technology has been integrated so much into their lives that gifts that would elevate their digital lifestyle, such as app subscriptions or virtual 

currency, would be appreciated.   

4. Generation Alpha (2013 and Beyond) 

Generation Alpha is still in the process of growing-old and will integrate with technology much further than their predecessors. 

They will likely have reconditioned tastes for interactive and tech-driven gifts–intelligent toys and educational apps. 

Personalization and creativity will be quite important, and they would go for gifts that facilitate creation and customization. Given a growing awareness of environmental issues, they may also prefer eco-friendly and ethically produced gifts. 

Choosing between Physical or Digital Gift Cards 

The decision between physical and eGift cards takes on a contextual role. In B2C interactions, physical gifts often are preferred for personal touches that increase face-to-face connections and memorable experiences. 

In B2B interactions, eGift cards tend to come with convenience factors: ease of distribution, instant delivery, and fewer issues with redemptions-as reasons to lean towards eGift cards for large businesses. 

In the end, this should come down to the specific context and intentions of the gift discarding gift-exchange event. 

Either physical or eGift cards have pros and cons, so getting to know the giver and recipient well is essential to picking the perfect option. 

Giver vs. Recipient Preferences 

Gift givers and recipients are on opposite sides of the fence when it comes to preferences. While the majority of recipients value the convenience of gift cards, the givers would much rather opt for physical ones. 

In grievance surveys, 94.8% of participants describe physical gift cards much more socially acceptable.  

This gives way for the rationale that physical cards are a lot more thoughtful, whereas eGift cards, even though they are more convenient, come across as a thoughtful, last-minute option.  

The Bottom Line 

In other words, gift-giving has evolved from a physical form into a modern form of digital. The transition to digital also represents the modern consumer’s changing preferences and needs.

Although physical gift cards still offer sentimental value, digital gift cards provide unprecedented convenience, personalization, and advantages for the environment. 

In the final analysis, it is important that the choice of either endeavor is shaped by the confluence of specific context and desire that pertains to the givers and the beneficiaries, thus assuring a gift exchange that has a meaningful and impactful outcome.