What’s the difference between gift cards, vouchers, and eCodes?
Intrigued about buying gift cards, vouchers and e-Gift codes but are a little confused about the difference between them?
We’ve got you covered with this comprehensive guide including all of the need to know information, together with the perks and downfalls of each, so you can determine which gifting method is perfect for you.
Keep on reading for the lowdown or skip on to read about the specific method you’re interested in.
What is the purpose of gift cards and codes and why are they so popular?
First up, you’ll likely want to know why you should choose gift cards and codes over your standard physical present and why they have become such a popular alternative in recent years.
According to Gail Cohen of the Gift Card and Voucher Association, “the UK Gift Card market – including gift cards, vouchers, digital, e-gift codes was worth just under £7bn in 2019.”
This method of gifting is proving to be popular across the board with all age ranges reaping their benefits. Shoppers aged 35-54 (Generation X) spent £1.76bn on gift cards and vouchers throughout 2019 alone, while those 55+ Baby Boomers spent £1.73bn, followed by 16-34 Generation Zers and Millennials who spent £1.17bn treating their loved ones.
The main reasons shoppers are opting for cards and codes is that it takes the huge, relentless pressure out of shopping and buying gifts. Whether you’re wanting to buy a present for someone you don’t see often, or aren’t sure what they like, gift cards, vouchers and eCodes enable you to treat them without taking away the choice.
When you purchase a card or code, you are essentially giving the giftee the freedom to choose so they’re not landed with a present that they’re likely to re-gift or throw into the back of their wardrobe.
The size of the online gifting market in 2019 was worth £2.33bn, which is half of the entire shopper expenditure, meaning that consumers love to buy codes online just as much as they like to pick up cards up in store. It’s safe to say the industry is thriving! Do you want in?
Why buy a gift cards or code over a physical present?
Did you know that according to a study by Royal Mail in 2018, one in 4 Britons would rather receive gift cards and vouchers over a physical product? Almost three quarters of British shoppers in 2018 bought cards and vouchers as gifts and since then the industry has thrived with a fifth of gifters rather purchasing gift cards and vouchers.
Many consumers of gift cards and codes like to buy them in place of a physical gift and one of the main reasons is because they’re just so convenient!
They make the ideal gift for if you don’t know what they’re into and don’t want to land them with a pointless gift they won’t like. By giving them credit to spend themselves, you’re ensuring they receive a gift that they will truly love.
You can choose to buy a card for a specific store they like, making the experience a little more personal, or can choose an array of merchants giving them the chance to discover something new.
Undoubtedly, one of the best things about opting for a gift card or code is that you can buy them super last minute, making them the perfect solution for forgotten birthdays and surprise events. They can be sent to family, friends and employees near or far!
In more recent times in the 2020 Coronavirus pandemic, the gift card industry saw gift cards and vouchers become a great aid to volunteers as they continued to be a secure alternative to paying with cash when shopping for others. In this case, when buying for those who were ill or isolating.
Many parents were also able to redeemed their free school meal vouchers in the form of gift cards that they could spend on food in supermarkets too.
Gift cards. We’ve all received one at some point from that distant relative on birthdays and Christmas’ gone by. You’ll probably remember those bittersweet moments when you’d be presented a card complete with jolly design and a handwritten note telling you how rich you’d become.
The nice thing about gift cards is the physicality of them. It’s like when you’ve got a spare £20 in your pocket ready to burn on a splurge as you hit the local shopping centre.
In most cases, gift cards are to be spent in-store which is a great option for avid high street shoppers but those who have a penchant for online shopping may find them a little harder to spend in comparison to eGifts.
The UK gift card and Voucher Association say that 31% of young shoppers have become regular consumers of new retailers after being sent a gift card. This demonstrates that they’re also a great way of helping loved ones discover something new.
Did you know you can buy gift cards online or in-store!?
These nifty gifts would ordinarily be purchased from a physical store and can look similar to a credit card. They usually carry a unique number too rather than the personalisation of a specific person’s name such as a gift voucher.
There are a number of places you can pick up a gift card. Many retailers stock their own branded gift cards to be bought and spent instore, as well as through the retailer’s website, and via 3rd parties.
You’re likely to have even spotted them at point of sale areas when paying for your shopping in supermarkets as well as they’re such a quick and easy last minute buy.
Some brands may also offer reloadable gift cards alternatively known as Top Up cards. These cards enable retailers to keep their customers returning to store regularly and increases their footfall. These cards can make especially good presents as they’re the gift that keeps on giving.
You may receive them as a work perk!
Companies can obtain personalised and branded cards for their employees which work as a great way of giving workers an incentive. Not to mention they’re a great way of showing thanks too. They’re a great way for bosses to reward employees on a regular or one off basis.
Employers can also save by taking advantage of the Trivial Benefit tax-free allowance. HMRC have published guidance for businesses to provide trivial benefits without a need to pay tax, National Insurance or let HMRC know.
An employer doesn’t have to pay tax on a benefit for their employee if all of the following apply:
- It costs you £50 or less to provide
- It isn’t cash or a cash voucher
- It isn’t a reward for their work or performance
It isn’t in the terms of their contract
Here are some examples of trivial benefits:
- Taking staff out for a meal to celebrate an occasion such as a birthday
- Gifting flowers to a member of staff who is celebrating the birth of a new baby
- A summer party
- Providing a £50 gift card (that is not exchangeable for cash)
- Buying christmas presents for employees
- Pizza Fridays
Sounds great right? If you want to find out more or you aren't sure whether a benefit counts as a trivial benefit you can call the HMRC employer helpline.
A few physical gift card cons
We know that one of the best things about gift cards is that they can be spent just as easily as money as you carry it around in your purse with you as you pursue your favourite stores, but unfortunately, the physicality of gift cards is also one of their greatest downfalls.
Just like money, in many respects if you lose a gift card or it is stolen, it can be hard if not impossible to get the value back.
As mentioned by Hillary Mendelsohn, writer of ‘The Purple Book: The Definitive Guide to Exceptional Online Shopping’ on creditcards.com, another major negative to plastic cards is that many use magnetic strips.
“Like pre-chip credit cards, those strips can occasionally get demagnetized by other things that you carry in your pockets or purse.
Some gift cards include a scratch-off panel. If you’re too zealous or use something too sharp you can accidentally remove the numbers underneath.” Once these numbers are damaged unfortunately your gift card can become invalid.
Unlike e-Gifts, with gift cards you don’t have the luxury of simply opening an app or email to check the credit that you have.
You can expect shop assistants to ask you the amount you have on your card and if you’re not sure, you then have to go through the more laborious task of visiting the issuers site, typing in the unique number or visiting a shopping centre help desk to find out otherwise you may risk it declining.
Gift cards sure are convenient, but being made from plastic does come with a huge cost for the planet, making them possibly the most uneconomically-friendly gifting option and one of their main downfalls when compared to options such as gift cards and codes.
Funnily enough the physicality of gift cards can mean they’re more easily forgotten about in comparison to a code which is sent virtually and is kept to hand on a mobile phone.
Just 50% of gift cards bought are spent within the first month of receiving them and over 98% are exchanged for a product within the year, whilst tens of millions of out of expired cards are thrown away. Though on the other hand, a huge amount of consumers do top up their cards with extra money!
What is an eGift code you may ask? Well, eGifts, also referred to as digital, electronic, virtual, and mobile gift cards, could just be deemed as the future of gifting.
This modern, internet savvy way of gifting uses an electronic code which is sent to the giftee online rather than in physical form. This can be delivered via email, text, or app cutting out the need for a tangible gift card that could be lost or stolen.
This method of gifting can allow the recipient to receive their gift within a 24 hour time frame and sometimes almost instantaneously depending on the merchant.
This means that you as the gifter can send them a present super last minute, complete with a personalised or branded message, and it’ll hit their inbox almost immediately ready for them to spend.
You don’t have to spend them online either just because they’re sent and received in that manner. There are a huge array of brands and facilities that are available via e-gifting including cinemas, restaurants, highstreet shops, experiences and so much more!
For instance you could buy yourself and a friend an e-gift code and spend it in person on your next trip to the cinema.
Why is this gifting method so popular?
So why does this gifting method arguably trump gift cards and vouchers?
As publisher Orion explains, E-vouchers are so popular as they can be delivered and redeemed in real time and can be spent in store or online using a PIN code.
There is no plastic element meaning this process is much more environmentally friendly and instead of this credit card style token being the gift, the email or text message takes its place.
eCodes are becoming increasingly popular with the under 30 age bracket. It is found that millennials and Generation Z love the fact you can access codes with such speed anywhere at any time thanks to similarly savvy new age Wifi and mobile roaming.
How do they work?
So if you don't have a physical card, how do you use your credit?
Your unique gift code will ordinarily be received in the same format it is sent to you. So, if your friend were to send it via an email, you can expect to find it via the same means.
When shopping online, depending on the brand, you can either expect to enter your code in a code box via the checkout screen, or alternatively you can also upload your credit when you sign in to your account.
If you’ve spotted something in-store that you want to purchase, you can take your phone to the cash desk and present it on screen for the assistant to enter.
If you’re worried about losing Wifi whilst in store, worry not, your code will still work if you need to take a screenshot or note of it, or if you print it out at home to have it in a physical format.
If you’re really struggling with finding out how to spend your credit for a specific brand, usually you can expect to receive a confirmation email or message that will lay out specific instructions on how to use it in store or how to set up an online account.
If you’re lucky enough to receive an eGift and can’t seem to locate it, you can contact the retailers customer service or the 3rd party website or app where you purchased it to see if they can resend your code.
So what’s the catch?
Though one of the greatest perks of e-Gifts is their speed and convenience, there must be extra care taken when completing the finer details. Imagine for example that your giftee no longer uses the email you have sent the code to or you spelled the email address incorrectly.
The eGift card merchants job is to issue the code to the giftee and once this transaction is deemed successful and the code has delivered, the issue is out of their hands.
It is therefore imperative the customer check address spellings to ensure correct deliverability or else risk the giftee not receiving their code and you losing cash.
The code issuer may decide to help and resend the e-gift, however, many merchants Terms and Conditions outline that once the code is delivered their part is complete. Double check that address is valid to avoid strangers picking up a lovely surprise in their inbox instead.
Even though an e-gift is a quick fix to last minute present problems, make sure you put in the same care into its delivery as you would writing a birthday card or their address when posting a physical gift.
If you’re uncertain of your giftee's email address and have to check ahead of time, or need to ensure they’ve received it, this could take away some of the magic of the surprise too.
Even though e-gift cards can make such a great last minute gift, try not to leave it ‘til literally the last moment. Though some gifting companies can process your request instantly, some take a little time to run fraud checks, approve your purchase, and deliver so it’s wise to leave at least an hour or two to ensure it arrives on time.
You don’t want unforeseen issues ruining their special day!
Fundamentally, a gift voucher is a note made from card or paper that can be exchanged for items of the same amount or more.
You’ll often find when ordering gift vouchers online that you are able to personalise your voucher to the giftee. Gift Vouchers can also be presented in a gift wallet or envelope that is covered in a customisable design based on the event ie. ‘Happy Birthday’ or ‘Merry Christmas.’
How do Gift Vouchers work?
Gift Vouchers are very much like your classic gift cards, whereby the customer would purchase the voucher for a specified amount which can then be exchanged for the same value or more in an affiliated store or business.
Like a gift card, you would present your voucher when checking out at the till when purchasing an item. Though sometimes unlike gift cards, these vouchers can only be used once so you may have to spend the full amount or more depending on the retailer.
If the store does warrant multiple time use, you may receive a fresh gift voucher holding the remaining unspent amount, or the assistant may write the new amount on your existing voucher. There is more room for error when calculated by a person rather than a till the way gift cards are.
Some drawbacks of Gift Vouchers
The main flaw with gift vouchers is that because they are ordinarily printed on paper or card, they are much more susceptible to damage and wear and tear.
This means that if you accidentally rip your voucher or spill something on it, it would become void. This is a reason many brands these days choose cards over vouchers as they’re far more durable.
In relation to businesses, gift vouchers are often outshone by gift cards and eCodes as vouchers tend to be far more laborious. They need authorisation by signature from the merchant of supply and there are no electronic checks made as there are with gift cards and eCodes either.
So, now that you know the difference between the big three gifting options, which method will you choose?