Gift cards have evolved from simple gifting tools into powerful retail instruments that drive revenue, customer acquisition, and brand loyalty. In Australia, the gift card market is experiencing robust growth, offering retailers a unique opportunity to enhance their bottom line and customer engagement strategies.

Market Dynamics and Growth Drivers

Australia’s gift card market is projected to grow from US$7.42 billion in 2024 to US$11.85 billion by 2029, reflecting a compound annual growth rate (CAGR) of 9.6% ¹. This growth is largely driven by digital and smartphone adoption, and the integration of gift cards into e-commerce and mobile platforms.

Digital Transformation: The integration of digital gift cards with mobile payment systems and e-commerce platforms has significantly increased their convenience and accessibility. The expansion of digital wallets like Apple Pay and Google Pay, along with the surge in e-commerce activity, has encouraged retailers to offer digital gift cards as flexible and quick gifting solutions.

Corporate Gifting and Incentives: Corporate gifting is becoming a key growth driver in the Australian gift card market. Businesses are increasingly using gift cards for employee rewards, customer incentives, and promotional campaigns, contributing to market expansion.

Consumer Behaviour Trends: Gift cards are among the most popular gifts in Australia, with significant uptake among younger consumers. Notably, purchasing gift cards for self-use continues to grow with 1 in 3 gift card consumers buying cards for themselves².

Key Benefits to Retailers

Revenue Enhancement: Gift cards often lead to incremental revenue. When customers redeem gift cards, they typically spend more than the card’s value. Our study indicated that over 47% of gift card users spend an average of 36% more than the card’s face value ². This uplift directly contributes to higher average transaction values and increased profitability.

Increased Basket Size: Gift card redemptions are associated with larger basket sizes. Consumers perceive gift card funds as “free money,” making them more likely to purchase premium items or add extra products to their cart. This behaviour is particularly evident in sectors like electronics, fashion, and home improvement.

Customer Acquisition and Brand Exposure: Gift cards serve as entry points for new customers. When a gift card is given, it introduces the recipient to a brand they may not have otherwise considered. This not only expands the customer base but also increases the likelihood of repeat visits and long-term loyalty. According to an AGPCA study almost 1 in 3 said they had been influenced to shop at a store they wouldn’t have otherwise due to a gift card with a further 1 in 5 saying they became a regular customer at a store they didn’t usually shop at.²

Omnichannel Integration and Digital Engagement: The rise of digital gift cards has enabled seamless integration across online and offline channels. Retailers can use gift cards as part of loyalty programs, promotional campaigns, and mobile apps, enhancing customer engagement and data collection.

Innovations in Gift Cards

Personalisation and Digital Experience

Gift cards are being tailored to reflect individual preferences, life moments, and real-time occasions. The integration of custom messages, video greetings, and QR-enabled packaging is redefining customer delight.

Websites such as card.gift and Prezzee take the traditional greeting card experience to the next level. Instead of just a plain text message, customers can add heartfelt video greetings.

Sustainability and Materials Innovation

Eco-conscious consumers are pushing retailers to rethink the material footprint of their physical cards. In response, issuers are reducing plastic use, transitioning to biodegradable or recyclable materials, and promoting digital alternatives. Card manufacturers, such as ABCorp, are committing to sustainable manufacturing practices and Thames Technology (UK) recently launched Puller Zero, a PVC-free NFC gift card compatible with contactless payments.³
This aligns with Australia’s retail sector ESG commitments, creating potential for retailers to adopt eco-friendly card stock as part of a broader sustainability narrative.

Strategic Recommendations

1. Digital Integration: Invest in digital platforms to offer e-gift cards, enhancing customer convenience and expanding reach.
2. Data Analytics: Utilize data from gift card transactions to understand customer preferences and tailor marketing strategies.
3. Partnerships: Collaborate with other businesses and platforms to broaden gift card distribution channels.
4. Security Measures: Implement robust security protocols to safeguard against fraud and build consumer trust.

Conclusion

For Australian retailers, gift cards are more than just a seasonal sales tool—they are a strategic asset. By leveraging gift cards to drive sales, attract new customers, and enhance digital engagement, retailers can unlock significant value in a competitive market.

References

1. Australia Gift Card Market Report 2025
2. Australian Gift and Prepaid Card Association 2025 Market Report
3. Thames Technology launches Pulper Zero NFC, fully recyclable and biodegradable NFC prepaid paperboard cards developed in collaboration with Holmen Board & Paper and CCL Oomph; paperboard cards are currently available for closed-loop use