Once a humble piece of plastic tied to a single merchant, gift cards have evolved into flexible ecosystems that sit at the forefront of many brands. A major driver of this transformation has been digital gift cards, which have reshaped the way the industry views prepaid products.
Today, gift cards are not only central to loyalty programs and employee engagement efforts but also remain consumers’ go-to choice for gifting. Yet, the evolution of the gift card industry is far from over. In fact, 2026 is shaping up to be a pivotal year for sustaining the continued momentum of this dynamic market.
A Level of Stability
One of the challenges shoppers face is a macroeconomic environment where inflation and interest rates have tightened budgets and increased credit card debt. As a result, many consumers are becoming more tactical in their shopping and payment decisions.
“With the macroeconomic environment, gift cards offer a sense of stability,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy and Research. “They are—and broader than the term gift cards—stored value, the ability to have that money that’s either budgeted out or stable. The price of an item can change, but the value of that gift card is going to be the same, so that really creates a level of stability.”
Beyond economic conditions, another driver of growth is the rise of e-commerce and the adoption of digital payment methods. This trend has fueled widespread use of mobile wallets and stored-value accounts across retailers of all sizes.
Additionally, there has been a substantial increase in the corporate use of gift cards. More employers are incorporating prepaid products into their employee appreciation programs, offering gift cards as bonuses, holiday gifts, or rewards.
Prepaid rewards can make a meaningful impact with employees for the same reason gift cards have become the most popular gift overall: they provide the recipient with the flexibility to choose what they truly want.
What’s more, gift cards have also become a common way for consumers to treat themselves.
“When I talk about stored value—and this goes to really the umbrella over everything—it’s that shift in mentality from gift cards and gifting to self-use,” Hirschfield said. “Self-use is on the rise due to things like incentives, which is I’m going to take advantage of a consumer offer. I might buy my tires because I’m getting a $100 gift card back, and that’s a self-use choice.”
Loading Up the Account
The evolution of the gift card industry—particularly the rise of stored-value accounts with self-use potential—is impacting consumer behavior, even when shoppers may not fully realize it.
“Often, people don’t put loading up their account for their favorite coffee shop or fast-food restaurant in the gift card bucket,” Hirschfield said. “Food services is big into this because when you’re giving your kids a budget where, ‘You want to go get your chicken sandwich and your milkshake, here’s how much you get a month,’ and it’s all in their stored-value account, that is all in the realm of what has been considered gift cards.”
“It’s moving to stored value, and that hits at that self-use motivation and it all ties into things that affect behaviors,” he said. “It affects reward behavior and loyalty behavior. The more loyalty points I get, the more rewards I get, the more I can take a part in that and maybe get that extra free item.”
These loyalty-driven features boost engagement, as many consumers are first introduced to new brands through gift cards. Additionally, recipients often sign up for loyalty programs and maintain ongoing interactions with an issuing organization after using a gift card.
Perhaps more importantly, consumers frequently use gift cards to make larger purchases, spending beyond the card’s initial value.
All these factors are not only influencing consumer behavior but also transforming how organizations approach and leverage gift cards.
“Companies were working to say, ‘We’ll get a little bit of breakage, we’ll take those pennies that are left over and we’ll count that as revenue.’” Hirschfield said. “That’s not the target of the gift card industry anymore. Now it’s reload, it’s consistent turnover of that money and reload of that money to increase volume and increase spend, those are the important things.”
The Digital Paradigm
Another factor shifting the perception of gift cards is the rise of digital gift cards. While some buyers may still prefer a physical card for certain occasions, digital gift cards are gaining popularity for several reasons.
First, digital gift cards are more convenient to purchase and use. They can be sent instantly via email, text, or other platforms, making them easy to give and receive.
They also offer greater flexibility because they can be integrated with mobile wallets and used either in-store or online. In addition, they allow for personalization, with options to include messages, themes, music, or videos.
Digital gift cards also give consumers more control. Users can swap, split, and manage balances across multiple brands in real-time, all while benefiting from enhanced security features.
Overall, digital gift cards present a powerful opportunity for businesses to build stronger, longer-term relationships with their customers.
“When that account is tied to you, you can check your balance,” Hirschfield said. “But also, it ties into that data collection opportunity where it’s mutually beneficial in loyalty and rewards. It’s making sure that you’re getting the items that you want. ‘Hey, would you like to repeat your order, and would you like to use your gift card balance to pay for that?’ Those are all things that come from that digital.”
Understanding the Value Chain
The shift in consumer preferences, coupled with advances in technology, suggests that digital gift cards are poised to capture a larger share of the gift card market next year. At the same time, the broader prepaid market continues to experience strong growth.
“Growth is really strong, we have it at 7.5% to 8% compounded growth rate—others in the industry have very similar numbers—and that leaves a lot of opportunity to go beyond that,” Hirschfield said. “Some segments of the industry are shrinking, some are growing, but it’s really a matter of understanding where you sit in that value chain of gifting versus self-use.”
Once brands understand how to strategically leverage digital gift cards, they will look to companies like Prezzee, which are driving the shift toward a more digital experience.
“To me, it’s about understanding that marketplace of who the user is and who the buyer is,” Hirschfield said. “In the end, everyone’s a self-user when they get the card, but how do you load that value is the first step in understanding that. That—to me—is a driving trend of 2026.”
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