Why millennials prefer electronic gift cards
With the holiday glut fast-approaching, you may want to think about avoiding plastic — gift cards that is.
Just as giving actual bricks-and-mortar gifts gave way to gift cards, those cards are now giving way to their virtual versions.
The early fans of electronic gift cards? Millennials. In a new survey from Bankrate.com, 14 percent of 18- to 29-year-olds say they've given or received a mobile gift card, double the share of 30- to 49-year-olds and more than the 6 percent of 50- to 64-year olds who had done so.
Respondents weren't asked why they preferred one type of gift card over another, but millennials may have offered a hint. They were about twice as likely as other consumers to say they've lost a gift card before they could spend down the balance.
Electronic gift cards, which can be accessed through email and via smartphone apps, may appeal to people worried about losing the cash, says Jeanine Skowronski, credit card analyst for Bankrate.com. “[Electronic] gift cards are definitely harder to lose,” she says. “It can exist in your email, as opposed to a piece of plastic that may or may not make it into your wallet.”
Aside from being easier to track, virtual gift cards, which can be bought with a few clicks of the mouse, are more convenient than plastic gift cards, she says. (Not to mention, they're a quick fix for procrastinators in search of a last-minute gift. No wrapping needed!)
Electronic gift cards are growing more common. This year, 59 percent of gift cards are available electronically, up from 41 percent in 2010, according to Bankrate.com, which also analyzed the terms and conditions for 62 widely held gift cards.
When it comes to where gift cards can be spent, the most popular types of cards — general purpose cards — are also the most expensive. All seven of the general gift cards studied charged a purchase fee between $3.95 and $6.95, compared to 7 percent of store-specific gift cards.
One way they're like any other gift: You can hunt for deals. Some people may save by looking for discounted gift cards on sites such as Raise.com or Gift Card Granny.