In today's world, where most things happen online and speed matters. Convenience is extremely valuable, almost like money itself.
People are ready to pay more or choose one brand over another just because it's easier or faster.
Gift cards are a perfect example of that convenience. They’re easy to buy, easy to send, and easy to use, making them extremely valuable in today’s fast moving, online driven economy.
What started as a simple plastic card folded into birthday envelopes has become the best strategy for modern businesses, especially in the world of ecommerce.
Whether you’re shopping for a last minute present or a brand looking to attract new customers, gift cards offer a win win solution that’s both practical and profitable.
But have you ever thought when gift cards were invented, or who came up with the idea?
The journey of the gift card, from its modest beginnings to becoming a must have feature in platforms like Magento 2, is both fascinating and effective.
In this blog, we’ll learn about the full story behind gift card history, explore their transformation in the digital era, and break down the real benefits of gift cards in ecommerce.
Whether you're a business owner who wants to boost sales or a developer exploring the best Magento 2 gift card extension, this guide will show you why gift cards are no longer just a convenience; they're a conversion tool.
A Brief Overview of Gift Card History
When Were Gift Cards Invented
Gift cards made their first impression in the United States in the early 1990s. While various forms of prepaid vouchers had been in use earlier, such as gift certificates and paper coupons, the concept of a refilled, branded plastic gift card appeared around 1994.
Who Invented Gift Cards?
Funny enough, the origin of gift cards is a bit of a retail mystery, like one of those inventions where a few people had the same great idea around the same time.
Most people credit Blockbuster, the old school video rental giant, for bringing gift cards into the spotlight in the mid 90s. And that’s fair, they were the first to launch them big, with flashy plastic cards, national marketing, and a system that let people use them in multiple locations. For many of us, Blockbuster gift cards were the first we ever saw.
But here’s the twist: Neiman Marcus, the high end department store, actually beat them to it.
Yep, back in 1994, Neiman Marcus quietly introduced plastic gift cards, but didn’t shout about it. There was no major campaign, no shelf displays, no holiday push.
It was more of a soft launch, almost experimental. So while they technically were the first to invent and use gift cards, their low key approach meant Blockbuster got all the credit when they moved out their version just a little later, with much more hype.
In the end, it’s a bit like this: Neiman Marcus came up with the idea, but Blockbuster made it famous.
The Evolution of Gift Cards: From Plastic to Digital
The initial success of physical gift cards paved the way for digital innovation. As technology advanced, so did the formats of gift cards.
Electronic gift cards started appearing in the 2000s, allowing customers to send value via email or mobile messages.
The rise of ecommerce platforms set well with this change, enabling companies to provide smooth, digital gifting experiences.
Gift cards are becoming quite adaptable tools in online retail settings because they can be scheduled, refilled, personalized, and even branded.
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Benefits of Gift Cards in eCommerce
Gift cards are not just convenient; they are a strategic asset for modern businesses.
Here are the top benefits of gift cards in eCommerce:
1. Boost Sales and Average Order Value
Gift card recipients often spend more than the card’s value. According to study, 65% of consumers who redeem gift cards end up spending an average of 38% more. This means increased AOV for merchants.
2. Drive New Customer Acquisition
Gift cards serve as a gateway to new customers. When someone receives a gift card, they are more likely to visit your store, even if they’ve never heard of your brand before.
3. Improve Cash Flow
Selling gift cards generates upfront revenue, even before products or services are delivered. This prepaid model improves liquidity and supports inventory planning.
4. Boost Customer Loyalty
Providing gift cards as part of loyalty programs improves engagement.
It also provides repeat opportunities for interaction, especially when combined with promotions.
5. Reduce Returns
Gifts can be hit or miss, but gift cards eliminate the guesswork.
Customers choose what they want, which leads to lower return rates.
How Gift Cards Enhance the Customer Journey
Awareness Stage
Gift cards create word of mouth exposure. When people receive gift cards, they’re introduced to new brands, especially during the holiday season.
Consideration Stage
Customers who are doubtful about buying may feel more comfortable purchasing a gift card for others or receiving one themselves. It reduces conflict in the buying decision.
Purchase Stage
Easy to apply, gift cards make checkout faster. Combined with discount codes or free gifts, they provide extra motivation to convert.
Post Purchase Stage
Satisfied customers often repurchase or recommend the brand.
Offering loyalty points or free gifts with gift card purchases nurtures that relationship further.
5 Tips for Implementing Gift Cards in Your eCommerce Strategy
#1. Highlight Gift Cards on Homepage & Checkout Pages
Make them easy to find and buy.
#2. Use Gift Cards in Promotions
"Buy a $500 gift card, get $50 free" is a proven tactic to increase spend.
#3. Personalize Gift Card Templates
Let users upload photos or write personal messages to add emotional value.
#4. Track Analytics
Monitor usage, redemption rates, and purchasing behaviors to enhance campaigns.
#5. Combine with Magento 2 Free Gift Tools
Encourage larger cart sizes or seasonal promotions using free gifts as a hook.
Future Trends in Gift Cards & eCommerce
Gift cards are evolving beyond just retail. Here are some trends shaping the future:
1. AI Powered Personalization
Machine learning can recommend the best-value gift card for each user based on purchase history.
2. Cryptocurrency Gift Cards
Bitcoin and other digital currencies are being integrated into gift card systems, particularly for tech savvy audiences.
3. Social Gifting Integration
Customers can now send digital gift cards directly via WhatsApp, Instagram, or Mobile Message.
4. Sustainability in Gifting
Eco conscious brands are promoting digital cards over plastic ones to reduce waste.
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Conclusion
Gift cards have come a long way, from quiet beginnings at Neiman Marcus to Blockbuster's big rollout, and now to the sleek digital options embedded in today’s eCommerce platforms. What started as a convenient last minute gift idea has transformed into a planned revenue booster for online stores.
In the world of ecommerce, particularly with useful tools like Magento 2 gift card extensions and free gift promotions, gift cards do more than just bring sales; they help attract new customers, improve loyalty, and overall shopping experience. They’re not just a seasonal trick anymore; they’re a smart, scalable solution for growing your business all year round.
Whether you're just getting started or optimizing a grown online store, gift cards are one of those features that are simple on the surface but extremely effective when used right.
So the next time you think of a gift card as just “store credit,” remember: it’s one of the most effective tools in your ecommerce toolbox.
