Mercator Blog

Has the Age of Plastic Gift Cards Ended?
Date: February 24, 2014
Research Team

The last holiday season may have been the tipping point for virtual gift cards. InComm, a prepaid distribution company, said that the gift card issuers it partners with saw digital gift card sales outpace physical gift cards, according to a report in CSP magazine.

Citing numbers from the Portland, Ore., company Giftango that InComm acquired last year, [Matt Merker, InComm’s national sales director] said that for the first time ever, the purchase of digital gift cards over the Dec. 2013 holiday time frame outpaced physical cards 57% to 43% among Giftango card issuers. It's a trend that will only continue to gain momentum, he said.

Granted, InComm’s issuers are a subset of the whole industry, but Mercator Advisory Group has expected that virtual cards would reach a tipping point once enough gift givers began to take advantage of their convenience and speed of delivery. The question remains, though, was 2013 really a tipping point for virtual cards?

To answer this question and more general questions about the growth of the closed-loop prepaid market in 2013, Mercator Advisory Group has begun its annual survey of issuers.

Recognizing that the one thing that every gift card manager craves is information, Mercator is reaching out to closed-loop issuers to create a market size estimate and learn about the volume that flows through different distribution channels and form factors.

The goals of the research, as always, are to provide you with information to help you be successful and to give the industry a sense of the big picture.

This year Mercator has made some changes in our approach to this survey to make it easier to complete.

  1. The survey is shorter—only seven data questions.
  2. To give value back to the respondents, we will hold a Webinar for everyone who responds so that they can see and discuss the results of the survey. 

As always, confidentiality is our highest priority, and the data collected will only be used to produce aggregate numbers. Individual issuer data will not be revealed by Mercator Advisory Group.

In the past, retailers have expressed concern about the security of the survey. We are using an online survey at the following link:

To protect the data, Mercator is working with a third-party survey company to host the survey. The following security measures are in place.

HTTPS means there is a secure socket layer protecting the data. Survey Gizmo, the site provider, has the following security in place:

  1.  PCI Compliance
  2. Advanced Encryption Standard—256 bit encryption
  3. MySQL database cluster
  4. Reviewed by Applied Trust (a third-party), scanned by McAfee and HackerSafe for viruses and rootkits
  5. Servers managed by Via West in Denver in secure facility

The questions on this survey are designed to answer questions that Mercator Advisory Group has been asked by the industry. These questions will help issuers find the answers they need for business planning, educating clients and partners, and communicating with the media and the government.

The plan is to gather all the responses by March 1, 2014 and present the analysis to respondents by mid-March.

Please contact me, Ben Jackson, with any suggestions, complaints, or questions! My direct line is 781-419-1706 .