Offering ubiquitous rewards is a surefire way to increase engagement with a loyalty program. Giving members a reward option that is easily convertible into a wide variety of choices almost guarantees an uptick in redemption rates, and few things are more ubiquitous than gift cards.
 
It’s little wonder, then, that recent data from NGC has found that most of these redemptions are for “big box” retailers that offer a wide variety of products.
 
According to the report, 28 percent of gift card redemptions went toward one of eight big box stores. These stores include retail giants including Walmart, Amazon, and Target, all offering products across a wide spectrum of departments, essentially upping the value of each redeemed point.
 
“Participants in loyalty programs often gravitate toward rewards they can use to stretch family budgets,” said NGC president Eric Thiegs. “For instance, cards for shopping, dining, home, or automotive needs that can be used for everyday essentials (or given as gifts to loved ones for the holidays or special occasions) make a difference to the household bottom line. The top gift card reward selections conveniently match consumer desires to save money.”
 
While eGift cards have, undoubtedly, gained steam over the past several years, the growing presence and power of mobile wallets have been unable to carve out a substantial foothold compared to traditional physical offerings: 85 percent of redemptions are still for physical cards, as opposed to only 15 percent for the digital variety.
 
“There’s a substantial population of gen X and baby boomers who prefer to redeem their points, miles, and cash back rewards for physical gift cards,” added Thiegs. “More Millennials select eGift card rewards, but there is also some digital backlash as end-users experience eCard technology issues, training gaps at the point of sale, confusion with mobile wallets, or even fraud. The world is digital, and loyalty programs will need to continue evolving to provide choices for both physical and digital reward options, but physical gift cards will continue to be perceived by many to be the safest and most universal option for years.”
 
Travel saw a huge spike in gift card redemption, accounting for nearly 40 percent of total cards redeemed. On the flipside, entertainment, gas, and home improvement saw substantial drops, the latter only making up 3 percent of total redemptions.
 
Gift cards are an easy way to bring ubiquity to a rewards mix, and the trends seen in this consumer data continue to show that these cards will continue to be a power player in the loyalty space.

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