Mobile Gift Cards Benefit Merchants & Customers at Point of Sale



We’ve all heard of gift cards.  We’ve all used them and sent them. They always seemed like a pretty big deal to me.  All I had to do was walk into almost any store, pick out a gift card for $10, $25, $50 or $100, pay for it, put it in an envelope and mail it off to that special someone for that special holiday.  Simple, right?  But what happens then? Do they really actually ever get used?

It is estimated that Americans are holding on to more than $30 billion worth of unused gift cards.  According to the stats, these unredeemed gift cards don’t always benefit the merchant due to the fact that it can cause complications with accounting and challenges for retailer analysts. Plus, the average consumer, when redeeming a gift card, typically spends more than the value on the card, producing higher revenue at the actual point of sale.  With that in mind, merchants should want consumers to redeem their cards.

A new spin on plastic gift cards is the relatively new mobile option. Mobile gift cards can help resolve the above issues and are increasinglyAndroid_SignIn becoming more popular.  Starbucks has proven that mobile gift cards may soon be as common as coffee in the morning.  Although they have only been available through Starbucks since early 2011, Starbucks CEO, Howard Schultz, estimates that more than 3 million consumers have paid for their purchases using mobile gift cards.  Target, who is the first major retailer with the ability to scan mobile bar codes in all of its stores is another example of mobile gift card success:  “The addition of mobile gift cards to our suite of mobile shopping solutions further simplifies the Target experience for our guests,” said Steve Eastman, President of

Mobile gift cards work like regular gift cards; but instead of plastic, they are stored on the consumer’s mobile phone. When redeemed, the merchant simply scans the bar code directly off the phone, making for an easy and quick transaction at the point of sale.  At this point, the gift card is instantly updated in real time. Going mobile has additional benefits for the merchant. They can notify mobile gift card holders of upcoming sales, promotions and new inventory, take advantage of customer profiling (which may be done securely through the POS database), and eliminate the overhead of purchasing plastic cards.  Furthermore, consumers are more likely to redeem them.

As for the consumer, the benefits are numerous. Anyone with a mobile phone (and Internet access) can use them without being tech savvy. Sending and receiving mobile gift cards is instant. Simplicity and ease of use, real-time transactions, balance and other account information is always at their fingertips. They are impossible to lose since they’re registered to the user’s account, and unless they forget their phone, they’ll always have it with them. Some cards even notify the consumer via their cell phone immediately upon walking into that specific store, reminding them that they have it.

When something benefits both the merchant and the consumer, especially when it comes to mobile technology (something that is increasingly becoming engrained in our life), it makes sense to use it.

And if it helps reduce the billions of dollars of unredeemed gift cards, clean up the accounting aspect for the retailer, and increase revenue and customer service at the point of sale, it sounds as though this new spin on gift cards may just stick.

*Although some security issues arose back in 2010, most issues have been resolved.

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About the Author

Editorial Team is a leading industry news site for the point of sale and payments industry.We are also the go-to resource for small business owners that want expert tips and inspiration on how to run a successful business. Collectively, our team of experts has decades of POS, payments, and small business experience.