eGift Cards vs. Physical Gift Cards: Which Drives More Revenue?

Gift cards are and will always be a strong and trustworthy income source for retailers across all industries. Moreover, the rising trend of flexible, easy, and customized gifts has made the discussion on eGift cards versus physical gift cards even more heated. They both generate significant retail revenue but differ in their appeal to other shoppers, with convenience, emotional value, and purchase context as the main factors.

The trends of gift cards in the digital world have influenced the shopping and gifting practices of consumers, especially in Christmas and other peak seasons, leading to a situation where companies have to weigh the pros and cons of each card type concerning its profitability, customer retention, and loyalty in the long run. Physical gift cards still remain in demand mainly because of people’s dependence on them, the tradition, and the custom of giving gifts among companies. Brands that have the gift card strategy in place and want to take full advantage of the sales from e-gift cards in both digital and physical environments need to be very cognizant of the impact of each format.

Change of Consumer’s Behaviour on eGift Cards vs. Physical Gift Cards

A consumer market has undergone a significant transformation over the last few years. The current digital consumer expects high convenience and is always seeking experiences. The switching of consumer habits and preferences has been an important factor in the choice of eGift cards over physical ones. A digital-first consumer prefers instant delivery of gifts, personalization, and mobile-friendly redemption, whereas a traditional consumer still values a physical gift.

The main trends in consumer behaviour:

• The choice of instant and mobile-friendly gifting over other ways of presenting gifts.
• Higher usage of digital wallets and online checkout.
• Continued cultural preference for physical gifting in many regions.
• Growth in last-minute digital purchases.
• Eco-friendly shopping choices are leading the way, furthering digital adoption.

The digital consumer choice indicates that, though eGift cards have generated significant revenue from the ease of digital transactions, physical cards continue to sell mainly because of the emotional attachment, making comparisons between eGift cards vs. physical gift cards always very relevant.

Instant Convenience of eGift Cards vs. Physical Gift Cards in the Digital Era

The trend of digital gift cards has been growing exceptionally fast, with one of its primary factors being the instant convenience that consumers have now adopted mobile-first shopping habits. The moment gifting became more spontaneous and digitally enabled, buyers expected nothing but instant delivery, flexible redemption, and seamless use across devices. The change has made the issue of eGift cards versus physical gift cards highly relevant for brands trying to cater to modern customers’ demand for speed and accessibility.

eGift Cards Dominate in Convenience

• Email, SMS, or mobile apps can be used for instant delivery.
• It means any gifting need can be met instantly.
• Online and in-store, anywhere the customer likes to redeem.
• It is absolutely for mobile-first shoppers.
• All the activity can be tracked.

One of the significant eGift card advantages is the convenience that drives sales, no doubt through impulse and spontaneous purchases during significant retail periods. Hence, digital formats are still winning over tech-savvy buyers and will continue to take their place in the future.

Where Physical Cards Still Appeal

Physical cards have been the most significant digital competitor throughout the years. However, now they offer a good mix of convenience and value for the mainstream consumers who still make frequent store visits and love having a physical product.

• Always present when making the usual weekly shopping trip.
• No tech skills needed at all.
• Perfect for cash people who do not rely on mobile payment systems.

The winner of the eGift cards vs. physical gift cards battle is obvious: the retailer’s digital push will always be driven by convenience, but they will also need to keep their physical formats for shoppers looking for easy, natural experiences.

Cost Efficiency: eGift Cards vs. Physical Gift Cards and Their Impact on Margins

From a profitability standpoint, cost efficiency is still a very prominent factor in the comparison of eGift cards vs. physical gift cards, or in other words, their evaluation. Retailers turning to digital platforms are the ones achieving the most operational savings, which are becoming increasingly important at scale. The digital format has eliminated most of the production expenses.

On the other hand, the distribution has become more efficient and has better potential for increasing volumes. This change is in line with the worldwide movements in e-gift cards, where the firms are trying to reduce expenses while keeping the quality of customer service high. Therefore, by understanding the cost structure well, businesses can determine the right balance between the broader retail gift card program and the one they are using.

eGift Cards Offer Higher Profit Margins

From a business perspective, eGift card revenue is more profitable because digital-only formats minimize overhead.

• No printing or production costs.
• No packaging or shipping.
• Lower inventory management requirements.
• Fewer logistical touchpoints.
• Near-zero distribution cost at scale.

These benefits make eGift cards a high-margin product ideal for online-first retailers and emerging brands.

Physical Gift Card Cost Structure

While still profitable, physical cards come with unavoidable additional costs:

• Card creation and design.
• Printing and material charges.
• Packaging such as envelopes, sleeves, boxes, etc.
• Freight and logistics.
• In-store stocking and display.

These expenses don’t eliminate the value of physical gift card sales, but they do reduce margins compared to digital gift card sales. When analyzing eGift cards vs. physical gift Cards, digital options clearly offer superior cost efficiency.

Impulse Purchases: eGift Cards vs. Physical Gift Cards in Last-Minute Buying

Impulse buying is still a strong revenue source for both types in the eGift cards vs. physical gift cards discussion. The online environment stimulates last-minute purchases, driven by urgency, social media reminders, and seasonal sales. On the other hand, the physical stores benefit from the placement of the display stands in a strategic manner, which triggers the customer’s spontaneous decisions. The shopping behaviour has changed, and impulse buying has become an essential factor in the digital gift card trends as well as the retail patterns of traditional stores.

eGift Cards for Online Impulses

Digital shoppers often purchase gift cards during:

• Forgotten occasions.
• Immediate gifting needs.
• Targeted promotions.
• Social media ads.
• Periods of high traffic during holidays

The plus of these activities is that they generate significant ups in eGift card revenue, particularly during holidays, flash sales, and festivals.

Cards for Physical Purchases in Store

Stores influence customers to make unplanned purchases and thus support the strong sales of physical gift cards.

• Supermarkets
• Retail stores
• Convenience outlets
• Pharmacies
• Hypermarkets

Gift card racks along with checkout aisles are always a significant factor in turning walk-in customers into buyers. When it comes to eGift cards vs. physical gift cards, the impulse factor is very important.

Customer Experience: eGift Cards vs. Physical Gift Cards and User Satisfaction

One of the determinants of the customer experience will be whether a person leans towards an eGift card or a physical one. Digital cards are better in personalization and convenience, but the physical ones carry emotional value that is part of the tradition of gifting. If retailers identify the most effective format to communicate to different customer segments, they can align their retail gift card strategy accordingly to the channels. With the increasing trend of digital gift cards, the customer’s expectations in terms of customization and instant use have been changing alongside.

The User Experience of eGift Cards Winning Over

• Personalized messages.
• Thematic holiday designs.
• Animated templates.
• Instant replacement.
• Mobile balance tracking.
• Integration with wallets.

The traits described above align with the requirements of digital-first customers, who prefer an easy, highly interactive shopping experience.

Despite The Drawbacks, Physical Gift Cards are Valuable

• Physical and attractive.
• Best for formal occasions.
• Perceived as more considerate.
• Perfect for giving with envelopes or boxes.

The emotional attachment helps sustain sales of physical gift cards during holidays such as Diwali, New Year, and Christmas, as well as at corporate events. Significant discrepancies in customer experience expose the distinct perceptions of eGift cards vs. physical gift cards.

Corporate and Bulk Purchases: eGift Cards vs. Physical Gift Cards in Business Gifting

Across various sectors, corporate gifting is the main reason for the high demand for gift cards. The business segment, when it comes to eGift cards versus physical gift cards, is still heavily dependent on traditional cards for formal show-offs, in-house events, and rewards. The rise of digital adoption, however, has been massive because of work-from-home, automation, and efficient distribution for large orders. The degree to which each format has a positive impact on the sales of e-gift cards and the sales of physical gift cards is determined by corporate culture and logistical arrangements.

Reasons Why Businesses Still Prefer Physical Cards

• Professionalism, branded presentation.
• Easy event distribution.
• Tactile reward value.
• Appropriate for ceremonies or formal acknowledgment.

Many companies still use physical cards because they are accustomed to this practice and consider it prestigious.

Corporate Adoption of eGift Cards is on the Increase

• Compatible with a remote workforce.
• Automated bulk emailing.
• Lower logistics costs.
• Immediate delivery to employees or clients.

The rise of hybrid and remote work has driven a shift towards digital options. For companies that are taking into account eGift cards vs. physical gift cards, the decision is made based on purpose, size, budget, and audience demographics.

Personalization and Marketing: eGift Cards vs. Physical Gift Cards in Promotional Strategy

Gift cards are undoubtedly a key factor in brand marketing and promotional strategies. With the implementation of such experiences across multiple channels, eGift cards have become the preferred method for gifting, loyalty rewards, influencer promotions, referral rewards, and holiday campaigns. The digital realm has provided a space for new and exciting ideas, while still allowing traditional cards to play a role in store promotion and brand recall. Both formats have become assets within a modern retail gift card strategy.

Advantages of eGift Cards in Promotional Campaigns

• Automated offers.
• Personalized gifting themes.
• Seasonal templates.
• Cross-selling and upselling.
• Loyalty app integration.

These features boost engagement and significantly enhance eGift card revenue during promotional periods.

Branding Opportunities with Physical Cards

• Visually striking designs.
• Premium packaging options.
• Limited edition collector sets.
• High in-store visibility.
• Shelf marketing value

These elements maintain strong physical gift card sales and contribute to long-term brand recognition.

Revenue Analysis of eGift Cards vs. Physical Gift Cards

The comparison of income between eGift cards vs. physical gift cards relies on aspects such as client demographics, the type of retail, and the marketing approach. Digital solutions are typified by accelerating adoption driven by their ease of use, personalization, and accessibility of mobile connectivity. On the other hand, physical cards are still favoured for high-volume retail and corporate gift-giving. The impact of these two formats on total revenue differs depending on the brand’s distribution power.

Where eGift Cards Shine

• Higher profits.
• The growth rate is similar to that of digital cards.
• Vigorous impulse buying activity.
• Personalization features.
• Low operational cost.
• Trends of acceptance.

Where Physical Gift Cards Lead

• Corporate demand is strong.
• High conversions in-store.
• Peak during seasons.
• Gifting through emotions.
• Strength of traditional retail.

In general, eGift card revenue is often more profitable than digital alternatives, whereas physical gift cards remain the largest in volume in specific retail sectors.

The Best Retail Gift Card Strategy: Combining Both for Maximum Revenue

The top retailers are adopting multiple methods that combine eGift cards vs. physical gift cards, strengthening their bid to generate the most revenue possible. A combination of different formats allows companies to attract different types of customers, change along with the seasons, and meet the customers’ changing demands. With increasing digital adoption and in-store traffic, a hybrid model is a must for a future-ready retail gift card strategy.

Hybrid Strategy for Maximum Revenue

• Promote digital cards online.
• Maintain a strong physical presence in-store.
• Leverage analytics for insights.
• Enable omnichannel redemption.
• Bundle with promotions or loyalty offers.
• Encourage reloadable digital options.

This balanced approach ensures brands benefit from both rising digital gift card trends and consistently strong physical gift card sales, ultimately maximizing total revenue.

Conclusion

Ultimately, the confrontation between the eGift cards vs. physical gift cards indicates that the best format is not the case in all retail situations. Nevertheless, total revenue remains highly dependent on matching each variant to customers’ needs, purchasing habits, and gifting behaviours. eGift cards are very much in digital-first environments, where they yield higher margins, quicker delivery, wider reach, and seamless alignment with ever-changing digital gift card trends, thus becoming a strong contributor to the Increase in eGift card sales.

On the other hand, physical gift cards still enjoy the benefits of gifting-related emotions, in-store visibility, impulse buying, and their stronghold in the corporate market, which constantly revives the sales of physical gift cards from year to year. Retailers that opt for a hybrid approach will not only be able to engage better but also be able to give customers more flexible redemption, and thus, build customer loyalty that lasts longer.

The balanced strategy of retail gift cards will not only enable brands to realize their fullest potential in terms of total revenue and to serve customers with various preferences, but also to keep an edge in a fast-changing retail environment where digital and physical gifting experiences are still significant.

FAQs

Do eGift cards bring in more profits for retailers?

Indeed, they have lower production costs and are more attractive for digital impulse purchases.

Are physical gift cards still a good business?

Without a doubt, physical gift cards are still a significant revenue source at retailers as well as in corporate gifting.

Which one leads to more overspending when the customer is redeeming it?

Both formats are typically associated with some level of overspend. However, eGift cards are likely to incur more overages due to the convenience of online shopping.

Are eGift cards much less dangerous in terms of security?

There is no doubt that they are more secure, since they offer the best possibilities for monitoring, authentication, and fraud detection.

Should retailers provide both formats?

Yes, a mixed retail gift card approach will have the advantages of a broader market, higher revenue, and better customer service.