Why Retailers Should Push Digital Gift Cards This Holiday Season

As the holiday season approaches, retailers are gearing up for what is traditionally one of the busiest times of the year. One trend that's steadily gaining momentum — and for good reason — is the move away from plastic gift cards and to digital.

The gift card industry is massive. In 2021, an estimated $171 billion in gift cards were sold in the U.S. alone, and that number is expected to grow by nearly 10 percent annually, reaching $239 billion by 2025. While physical gift cards still dominate the market, the shift toward digital is gaining traction as consumers become more aware of the environmental and practical benefits.

While plastic gift cards may seem small and harmless, they actually contribute significantly to the millions of tons of plastic waste generated annually. Most plastic gift cards are made from polyvinyl chloride (PVC), a material that’s not easily recyclable. In fact, very few recycling programs accept PVC, and when they do, the small size of gift cards increases the risk of contaminating the recycling stream. Consequently, the vast majority of plastic gift cards end up in landfills, where they take hundreds of years to decompose.

To put things in perspective, the International Card Manufacturers Association reported that nearly 17 billion plastic cards were produced in 2006, and about 10 billion new gift cards are created every year. PVC gift cards take approximately 500 years to break down, making the cumulative environmental impact of this waste staggering.

Not only do these cards persist in the environment for centuries, but the production of PVC itself contributes to carbon emissions. It’s estimated that producing 10 billion PVC gift cards annually generates more than 40,000 tons of CO2 — one of the greenhouse gasses linked to climate change.

By choosing a digital gift card, retailers can offer their customers the same convenience without the negative environmental impact associated with plastic. Digital gift cards are stored securely on mobile devices and can be accessed through digital wallets, which means there’s no need for a physical card at all.

Another critical factor in favor of digital gift cards is the energy savings associated with their production and distribution. The process of manufacturing, packaging and shipping plastic gift cards consumes significant amounts of energy and resources. In contrast, digital gift cards are delivered instantly via email or text, eliminating the need for physical materials and reducing the carbon footprint associated with production and shipping.

This shift toward digital isn’t just beneficial for the environment; it aligns with the digital lifestyles of modern consumers. With smartphones and digital wallets becoming more ubiquitous, shoppers are increasingly looking for convenient, secure and easily accessible options. Digital gift cards meet these needs, providing a seamless experience for consumers while supporting sustainability efforts.

For retailers, supporting the use of digital gift cards is not only a way to meet consumer demand but also an opportunity to demonstrate a commitment to sustainability. As more shoppers look to reduce their environmental footprint, retailers that promote eco-friendly options like digital gift cards can enhance their brand reputation and attract environmentally conscious consumers.

We're moving further into a digital-first world, and it's time for retailers to embrace sustainable, secure and convenient solutions for their customers. Digital gift cards offer all the benefits of their plastic counterparts — without the harmful environmental impact. They reduce plastic waste, save energy, and align with the digital lifestyles of today’s consumers.

This holiday season, retailers should lead the charge in promoting digital gift cards, not just as a modern convenience, but as a meaningful step toward a more sustainable future. By doing so, retailers can meet growing consumer expectations while making a positive contribution to the environment.

This isn't just a trend; it's a necessary evolution in how we approach gifting, and digital gift cards are at the forefront of this shift.

Julie Gu is the North America vice president of revenue for Prezzee, a global digital gifting company.