Gift cards have long been an essential part of a retailer's bottom line, especially in the apparel industry - where picking out the perfect fit and style for a friend or relative can be a challenge.

With new technology platforms available, apparel retailers now have the opportunity to evolve their gift card programs, offering consumers new and unique ways to purchase gifts.

The latest trend in the gift card industry is the introduction of digital gift cards - cards that can be ordered online and sent immediately via e-mail. With digital gift cards, shoppers can personalize the cards by selecting from a number of background designs, adding custom messages and even uploading a photo - something that cannot be done with plastic cards. In addition, research has proven that consumers prefer the convenience of purchasing a gift card online over traditional plastic gift cards.

Because these cards are ordered and delivered online, retailers also have the ability to layer promotions onto every transaction - to both the sender and the recipient. Retailers can create custom programs such as Give One, Get One offers, limited-time coupons, and special offers and promotions. Customer behavior can be tracked and tailored offers can be created based on this behavior.

But one of the greatest benefits to multi-channel retailers is that digital gift cards cost nothing to stock, have low set-up fees and very high returns, arguably making them the most profitable SKU in your online store. Below we’ve outlined just a few of the ways apparel retailers can reap the rewards of digital gift cards.

Offer personalized gift card options online.

Consumers are shopping online more than ever before. Make your gift cards available at their fingertips by offering a variety of online gift card options that shoppers can customize and give at the click of a button. Because gift cards are often last-minute gift purchases, eliminate shipping costs and delays by offering online gift cards that can be personalized with a photo and message and instantly e-mailed to recipients or printed by consumers at home.

Promote heavily prior to major gifting holidays.

During major gifting holidays your gift card promotions should be in high gear to ensure your cards stay top of mind with consumers. Give gift cards prominence on your website with creative banners and roll out a steady stream of themed e-mails to your database promoting your seasonal offering. Be creative and start your promotions early to create a sense of urgency and intensify these in the final days of the holiday gifting rush to drive last minute digital gift card purchases. You will sell a lot more gift cards if you do so.

Build buzz through social media.

Online gift cards are a no-brainer for the social media space. These tools and communities enable you to market your digital gift cards to consumers who are passionate about your brand. Integrate your digital gift cards into your Facebook and Twitter presence by:

- Allowing consumers to buy online gift cards through these or other social media platforms, or drive them back to your site with links and posts
- Launch exclusive gift card offers and incentives to your fans and followers and encourage them to spread the word to their friends
Use incentives to entice gift card purchases.

With the economic climate still uncertain, savvy consumers have grown accustomed to scouring the Web for deals and promotions from retailers. The same is true for gift card purchases. In fact, an overwhelming 88 percent of customers are more likely to buy a gift card that has an incentive or offer attached. Give customers extra motivation by adding offers onto digital gift card purchases such as an additional free gift card or bonus dollars for purchasing a certain amount or by a certain date.

Tailor offers by tracking behavior.

The new generation of digital gift cards enables retailers to turn what was once a blind transaction into a powerful tool for tracking customer behavior and building your e-mail database. Use the data generated from online gift card purchases to develop and execute more targeted promotions. For example, target offers to gift card recipients post-holiday to help encourage redemption, drive customers into the store and help increase sales lift in the following months.


Digital gift cards open up endless possibilities for apparel retailers to create new revenue streams not possible with traditional plastic cards.

The Internet enables retailers to create much richer content and a greater experience that is inherently personal and intimate. As retailers look for low-cost, high-value features to add to their online stores, they should consider expanding their gift-card programs with the addition of digital gifting solutions that offer strong returns at a minimal investment.

David D. Stone is the founder and CEO of CashStar, Inc., the digital gifting and incentives company. He can be reached at dstone@cashstar.com.