Do virtual holiday gift cards make sense for your business?

Holiday music is playing, heaters are whirring, and gift catalogs are arriving in the mail. All are a reminder that the time of year has come to let customers, clients, partners, and favored suppliers know how much you appreciate them.

Business gift-giving, however, notoriously tricky. Traditional defaults — fruit baskets, cookies, candy — can seem perfunctory, while an overly personal touch can backfire.

But what about holiday gift cards? It is true that gift cards are easy and highly appreciated. According to a Consumer Reports survey of 1,004 U.S. adults, more than half said they strongly or somewhat like receiving a gift card.

The problem with physical cards is that they can be challenging to keep track of, and it is not uncommon for at least a portion of a gift to remain unclaimed. Consumer Reports found that nearly 20 percent of American adults had three or more gift cards with balances on them. Nationwide, unspent gift cards add up. According to the Gartner research firm, nearly $130 billion worth of gift cards were purchased in 2015. Almost a billion dollars was left on the cards.

Physical gift cards from merchants, which you can find on sale everywhere, are also vulnerable to fraud. If cards are left out, codes can be copied and later used. For several years, a malicious bot named the GiftGhostBot has been targeting the gift card systems of online merchants and attempting to steal account balances.

Less vulnerable to loss or theft are virtual gift cards, sometimes referred to as e-gift cards, and they are rising in popularity. According to Blackhawk Network’s State of Consumer Gift Card Preferences 2018 survey, 55% of respondents said they would be interested in giving or receiving a digital gift card that can be added to a mobile app or a digital wallet.

Depending on the supplier, the giver can often upload photos to personalize his or her gift. A smaller number of suppliers support video messages.

Coupled with a thoughtful message that expresses gratitude about something specific, be it valuable feedback given during the year, attendance at an event or something else, the gift of a virtual card that can be spent anywhere can be another way of demonstrating genuine care.