E-Gift Certificates Set To Become Common Currency

With Jupiter Communications forecasting that overall gift giving will grow from $336 million (US$) this year to over $1.4 billion in 2002, the cyber gift certificate is poised to become all the rage.

The deciding factor is technology. Software developer C/Base introduced their ecount product only a year ago, and it is now being adopted by several companies as a means of generating online gift certificates.

The new technology enables users to securely complete online purchases from any merchant and instantly transfer funds to any ‘online individual.’

“We developed the ecount technology to bring an entirely new way for consumers to conduct transactions online through pre-paid Web accounts,” said Matt Gillin, CEO of C/Base. “It enables all online merchants to readily accept ecount-powered products, and lets all consumers, regardless of age, credit status or security concerns, enjoy the convenience and fun of e-commerce.”

Rise Of Prepaid Cards

Additionally, paper gift certificates are being displaced by a new medium — plastic. According to Total Systems, a card processor that recently developed a gift card for Nordstrom, more than one billion prepaid cards were printed in 1997. The company claims that gift card sales have grown between 11 and 15 percent annually since 1996.

It is estimated that there will be 840 million gift cards issued per year by 2005.

Hardware giant Home Depot recently began selling its gift cards on the Web in an attempt to build their e-commerce operation. The credit card-sized gift cards can be purchased in amounts of $10, $25, $50 or $100, and can be redeemed at any Home Depot, EXPO Design Center or Villager’s Hardware store in the United States. The cards are shipped by regular mail or other ground delivery systems.

Gift Certificates Only

A few companies are focusing exclusively on marketing gift certificates to e-merchants. GiftCertificates.com, for one, sells branded gift certificates for retailers, restaurants, and hotels. The company recently hired Sophia Loren as a spokesperson and represents clients such as Barnes & Noble, Bath & Body Works, Brooks Brothers, CHANEL, and The Sharper Image.

According to Webcertificate.com, another online merchant of virtual gift certificates, shoppers are expected to spend $9 billion online during the 1999 holiday season.

“People aren’t just giving a limited gift good at only one type of store,” said Chris Wolfington, Senior Vice President of Webcertificate.com. “They’re giving the exciting experience of shopping the entire Web with unprecedented choice and security.”