Gift card exchanges expected to witness steady growth

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The demand for gift cards is increasing throughout the world as a preferred non-cash instrument. However, billions of gift card balances go unused every year, due to unwanted, forgotten, and lost cards. Therefore, many times cardholders prefer to exchange gift cards for cash.

Given in the present scenario, when the coronavirus pandemic is largely affecting human lives and the economy, the demand for gift card exchanges is increasing to manage the unexpected financial crisis. Worldwide, the unemployment rate is increasing due to extended lockdown to control the spread of the virus. Therefore, it is expected that gift card exchanges to witness steady growth over the next four quarters.

Changing socio-economic condition is rising the demand

In recent years, the demand for gift card exchanges has increased significantly across the globe. The expiry period of gift cards has been extended or aligned with the regulatory suggested period in most of the countries. For instance, in Ireland, the Consumer Protection (Gift Vouchers) Act 2019, mandates five years expiry period for gift cards. However, it brings other challenges as well such as inflation can affect the value of the gift card, suspension or permanent closure of the retailer, and gift cardholder’s movement to another place where it would be difficult to redeem.

The ongoing lockdown on the wake of COVID-19 is badly affecting retailers as uncertainty about their business operation is rising. This is due to less footfall and restriction on shipping for non-essential goods. Consumers who hold gift cards usually willing to trade their gift cards with cash and the ongoing pandemic is fueling the trend.

Rising demand will attract gift card exchanges to launch new services

Consumers’ acceptance of gift card exchanges as a trusted source for gift card trading, is creating growth opportunities for these players. Furthermore, to avoid any negativity around fraud activities, gift card exchanges are focusing on gaining consumer’s trust. For instance, online gift card exchange platform such as Raise.com is accredited ‘A’ for its reliability by the Better Business Bureau (BBB). Additionally, to keep the present situation in mind gift card exchanges are providing more convenience to consumers. For instance, Cardtonic, a Nigeria-based online gift card exchange platform launched a mobile application in January 2020 that will make trading of gift cards more convenient for consumers. It is expected that gaining consumer’s trust in the current pandemic situation will help gift card exchanges to offer new and innovative services.

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