credit cards

E-gift cards for easy gift-giving

 

Most people would do anything to stay away from the malls during the mad-rush of the holidays. This is evidenced by the huge success of Amazon.com, cyber-Monday, and the advent of e-gift cards. E-gift cards are entirely digital currency that is purchased online and sent to the recipient's e-mail. In 2011, a whole slew of stores started to offer e-gift cards, but in 2012, their popularity among retailers panned.

Sound Bite, Janna Herron

"I think one of the reasons that retailers are slowing down in adopting e-gift cards is that they are just kind of feeling out what technology is coming next. There's been a lot of talk about mobile wallets and so retailers are looking into the mobile wallets along with the e-gift cards. And they don't want to just put everything out there and one of the technologies doesn't last."

Those that do offer the cards are homing in on a significant demographic, last-minute shoppers. The cards let gift-givers do their shopping on Christmas Eve and the recipient is none-the wiser. On Christmas morning, an e-mail is waiting in the giftee's inbox, as good as under the tree. The giver can even publicize their good will on social networking sites like Facebook and Twitter. E-gift cards are especially good for the consumer because they are purchased for a particular store, such as Best Buy, Target, or the Home Depot. These "closed loop" cards are better than their counterparts issued by credit card companies because store-branded cards tend to have fewer fees.

Sound Bite, Janna Herron

"Our survey found that all the general purpose gift cards, those with the American Express or Visa logos on them come with a purchase fee. So, that means that if you buy a gift card that's 25 dollars of value, you'd pay the 25 dollars plus anywhere between 3 to 6 dollars on top of that to buy the gift card. Whereas the store branded gift cards, most of them don't come with a purchase fee."

Some retailers are testing the waters with apps that let you check your gift cards balance, but still haven't committed to offering e-gift cards. There is also a host of apps that do everything from store and track your gift-card balances, sync your credit cards to your phone and send gift cards using e-mail, text or social media. To see all the latest trends and innovation, just check out the Credit Cards channel on Bankrate.com. I'm Lucas Wysocki.

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