US Digital Gift Card Market Size, Share, Analysis, Trends, Growth, 2032

US Digital Gift Card Industry Prospective:

The US digital gift card market size was worth around USD 367.20 billion in 2023 and is predicted to grow to around USD 1,887.96 billion by 2032 with a compound annual growth rate (CAGR) of roughly 17.80% between 2024 and 2032.

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US Digital Gift Card Market: Overview

The US digital gift card industry is a thriving sector with a higher adoption rate among the consumer group. A digital gift card is an electronic version of traditional paper-based gift cards. They are an excellent substitute for cash as the receivers can redeem the gift card during the purchase transaction of their choice. Digital gift cards are popular, especially as gifting solutions. Instead of buying a product or service for the recipient, gift cards of the same value can be purchased that can be redeemed at a time or place convenient to the gift card receiver. Physical cards offer dual advantages since they can be used either at a store or a website. However, digital gift cards are generally used when making online purchases. Several factors are driving the demand for digital cards in the US commercial market. For instance, growing reliance on smart devices for digital transactions is a major reason for higher regional growth. However, digital gift cards have certain limitations. For instance, the rise in online threats, scams, and frauds may discourage people from using electronic gift cards on websites.

Key Insights:

• As per the analysis shared by our research analyst, the US digital gift card market is estimated to grow annually at a CAGR of around 17.80% over the forecast period (2024-2032)
• In terms of revenue, the US digital gift card market size was valued at around USD 367.20 billion in 2023 and is projected to reach USD 1,887.96 billion, by 2032.
• The US digital gift card market is projected to grow at a significant rate due to the higher population density of people with smart electronic gadgets
• Based on the application, the consumer goods segment is growing at a high rate and will continue to dominate the regional market as per industry projection
• Based on the end-user, the corporate institutions segment is anticipated to command the largest market share
• Based on region, Northeastern states are projected to dominate the regional market during the forecast period

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US Digital Gift Card Market: Growth Drivers

Higher population density of people with smart electronic gadgets may fuel the market demand rate

The US digital gift card market is expected to grow due to the presence of a massive population group with access to smart electronic gadgets such as smartphones and wearables. According to market research, over 96.01% of the US population uses smartphones. Recent studies indicate that nearly 96% of US citizens use high-speed internet. The greater access to smartphones in the US is driven by several factors. For instance, the standard of living in the country is one of the highest in the world. The spending capacity of an average American citizen is higher as compared to certain developed and emerging nations. Moreover, easy loans for electronic gadgets as well as reduced prices of the smart devices further encourage more buyers in the commercial industry. Smartphone financing in the US is relatively easy and affordable. Most network carriers in the US like Verizon and AT&T offer zero-interest financing with monthly installments up to 36 months. Since a large number of people in the US use smart technologies in the form of wearables such as iWatch the demand for digital gift cards is significantly high. These technologies allow the use of digital cards with one scan making the purchase hassle-free.

Increased focus on personalizing and customizing gifting solutions will work in favor of the industry

The demand for digital gift cards in the US has been on the rise as more people are inclined toward offering customized gifts. Digital preloaded cards offer significant value since they can be redeemed across online sites. Recipients can buy products of their choice at their convenience. In addition to this, digital gift card buyers can purchase the cards from specific brands or stores that they know would be preferred by gift recipients. According to market research, more than 35% of US citizens are known to prefer personalized gifts. The demand in the US digital gift card market is high during the holiday season such as Christmas and Thanksgiving weeks.

US Digital Gift Card Market: Restraints

Growing cases of e-gift fraud in the region will limit the industry’s growth rate

The US industry for US digital gift cards is projected to be restricted due to growing cases of e-gift fraud. This trend refers to the incidents in which gift cards are bought by fraudsters from stolen payment information and credit cards. The digital gift voucher is then used for making another purchase to resell them at higher prices. Most digital gift cards do not require comprehensive background checks or personal details. This attribute makes them highly vulnerable to fraud and scams.

US Digital Gift Card Market: Opportunities

Increasing e-commerce shopping trends in the country to generate new expansion possibilities

The US digital gift card market is projected to generate more growth opportunities during the projection period. The steady growth in the regional e-commerce sector will prove beneficial to the industry players. In addition to this, the US e-commerce infrastructure has been on the rise. It is expected to generate more demand over the forecast period. As per the latest reports, Amazon, one of the world’s leading e-commerce companies originating from the USA recorded sales over 3 times higher in North America than combined international sales. The regional e-commerce sector is focusing on an improved supply chain ecosystem, enhanced customer experience, and an increase in the number of products or brands available online for purchase. Moreover, retail firms traditionally operating through brick-and-mortar shops are shifting toward introducing online channels to reach remote customers. In May 2024, Walmart launched Walmart Realm, an immersive digital shopping experience.

US Digital Gift Card Market: Challenges

Technical limitations of digital cards may challenge the market expansion rate

Digital gift cards have several technical and performance limitations. For instance, these cards are loaded with limited money and may not prove helpful if the product price is higher than the card limit. Additionally, certain vouchers available in the US digital gift card industry have hidden costs especially when the cards have to be reloaded. Studies indicate that customers tend to prefer physical gift cards over digital versions since they are easier to redeem at a retail store.

US Digital Gift Card Market: Segmentation

The US digital gift card market is segmented based on application, mode of use, end-user, card type, and region.

Based on the application, the regional market divisions are travel & tourism, restaurants & bars, media & entertainment, consumer goods, and others. In 2023, the highest demand was observed in the consumer goods segment. The growth rate is driven by the growing consumption of essential consumer goods such as electronic items, personal care products, home decor solutions, and others. The surge in shopping rates through online channels will fuel segmental demand during the projection period. According to official statistics, around 275 million people in the US regularly buy from online portals.

Based on the mode of use, the US digital card industry is divided into digital and brick-and-mortar.

Based on the end-user, the regional market segments are corporate institutions and retail establishments. In 2023, the highest growth rate was witnessed in the corporate institutions segment. The growing rate of corporate gifting is fueling the segmental revenue in the US. This trend allows companies to create touchpoints with different stakeholders including clients and employees. Amazon offers gift cards worth up to USD 10,000.

Based on card type, the regional market divisions are open-loop and closed-loop.

US Digital Gift Card Market: Report Scope

US Digital Gift Card Market: Regional Analysis

Northeastern states to deliver the highest return on investment during the projection period

The US digital gift card market is projected to be led by Northeastern states during the projection period. Regions such as Massachusetts and New York are likely to fuel the demand for digital gift cards. These regions are home to a large working population. Additionally, student population density in Northeastern states is gradually rising, driven by the presence of several influential education institutes such as Harvard University, Massachusetts Institute of Technology (MIT), and Boston University. The younger demographic of these regions promotes the use of digital gift cards. Additionally, West Coast states such as California may further fuel the regional market demand. The higher consumer spending capacity in Western states is influential in the growing use of digital gift cards. The regional population is highly tech-savvy. They are comfortable with using digital solutions for everyday shopping. The increasing shift toward contactless and quick transactions helps with the adoption of digital gift cards. Popular mobile wallet companies in the US offering integrated payment gateways enhance consumer shopping experience promoting higher revenue in the industry for digital gift cards.

US Digital Gift Card Market: Competitive Analysis

The US digital gift card market is led by players like:'

• Best Buy
• Sephora
• Walmart
• Amazon
• Airbnb
• Apple (Apple Store & iTunes)
• Microsoft (Xbox)
• Google Play
• Home Depot
• Target
• Uber
• Starbucks
• eBay
• Netflix
• PlayStation (Sony).

The US digital gift card market is segmented as follows:

By Application

• Travel & Tourism
• Restaurants & Bars
• Media & Entertainment
• Consumer Goods
• Others

By Mode of Use

• Digital and Brick & Mortar

By End-User

• Corporate Institutions
• Retail Establishments

By Card Type

• Open Loop
• Closed Loop

By Region

• The U.S.