This year's big gift: the gift card, in plastic or pixel form

“It’s thoughtful enough,” said Nate Matulis, 24, who works for a mechanical engineering firm in Warminster of his $50 gift card from his girlfriend’s sister and her husband. He bought a paperback novel with the gift card last week at a local Barnes & Noble store in Fairless Hills. He still had $10 left on the card after his purchase.

The gift card just keeps on giving.

These gifts are expected to generate about $130 billion in sales this year, up 5 percent from 2014. Within that group, the digital gift card is expected to grow to a $14 billion industry by 2017, double what it is now. A survey of 1,050 Americans from Sept. 14 to 16 by United Online Inc. - a California-based Internet provider of consumer products - showed that U.S. adults preferred receiving a gift card over other forms of gifts.

In fact, respondents preferred receiving a gift card for every category presented, including apparel, home decor, books, food and beverage.

When asked what they wanted most as a gift from someone else, a majority of respondents, 53.4 percent, said they wanted a gift card. This was especially true for baby boomers (age 51 to 69) and older, 58.1 percent, and also truer for females, 59.4 percent, compared with males at 43.8 percent.

With their tech savvy, millennials - those 18 to 34 - preferred digital gift cards to physical gift cards more than any other age group, at 33.3 percent.

Nate Matulis, who works for an engineering firm in Warminster, used his $50 card last week for a paperback version of The Name of the Wind by Patrick Rothfuss ($9.53 plus tax) at a Barnes & Noble in Fairless Hills.

He received the card from his girlfriend's sister and her husband for his 24th birthday in May.

"It's thoughtful enough," Matulis said as he scanned the card to pay for the book. "Maybe they weren't sure what to give me. It works.

"You can use it at the Starbucks in here, or buy a book," he said. "Either way, it's not money out of my bank account."

A similar survey, of 7,276 consumers October 5 to 13 by the National Retail Federation, found that nearly 6 in 10 (58.8 percent) consumers say they would like to receive gift cards this holiday season. It was the ninth year in a row that gift cards topped the list of most requested gift items.

Close behind was clothing or clothing accessories (52.2 percent) and books, CDs, DVDs, and video games (40.5 percent).

United Online is exploring how much millennials will like getting a digital gift card, starting with Black Friday.

Nathan Sweet is vice president of operations at MyPoints.com, an online loyalty program under United Online. His site offers access to thousands of retailers and allows customers to earn rewards by shopping online, taking surveys, and playing online games. The points that customers earn go toward purchases, and can be cashed in for gift cards or cash.

In February, the site, with Swappable, a United subsidiary, launched a digital gift card app.

"This is our first big test with the upcoming holiday season," Sweet said. "We feel this product can take off."

Sweet said he sees much potential with the millennial market, and Swappable is attaching a personal video, text messages, or photos with the digital gift card at no extra cost.

"We want to make it more personal - a nice, digital experience so it appears someone gave it some thought," Sweet said.

Sweet said gift cards remain the top gift of choice for a few reasons:

Ease of purchase. All stores accept them - which makes it the ideal utilitarian gift. "It's guilt-free, gift card giving," Sweet said. "You want to give something [people] want, and removes that guilt."

Delivery is evolving. While the gift card is delivered mostly by mail now, digital online apps, like Swappable, will mean the card can be purchased, or sent as a gift and redeemed immediately.

"Millennials want instant gratification - to receive it instantly, and use the gift card instantly. There is no wait time," Sweet said. "It's that last-minute, 'I have a birthday party to go to' kind of gift.

"We are expanding that idea and allowing him or her to swap a gift card with a different [retail] brand," he said. "Ultimately, when the holiday shopping season begins, what consumers are really looking for is choice."

Recently, gift cards were introduced to support investment in the stock market in the form of individual stocks. Certain purely online businesses, such as Music.com and Amazon.com, use gift cards.

Major retailers are jumping in. Last week, Macy's announced its partnership with Loop Commerce, the e-gifting option on Macys.com, to ensure accurate orders.

Target ties e-gifting with the mobile phone, complete with a Web video on how to send an instant electronic gift card.

Yet, despite their popularity, some gift cards go unused, said Brian Riley, principal executive adviser with the research firm CEB.

Riley said unclaimed gift cards accounted for less than 1 percent, or $500 million to $700 million of last year's $124 billion in total sales. That's down from nearly 10 percent in 2006, thanks largely to the CARD Act of 2009 that eliminated junk fees and expiration dates on the cards.

Consumers still do not receive protection if cards are lost or stolen or if the business fails, as with Sharper Image, Linen 'N Things, and others.

His best idea: Remember that they are not a savings product. Use them! Or, regift them.

And with digital gift cards, "we're looking to disrupt older institutions through mobile products - something that speaks to millennials," Sweet said. "Instant usage on a mobile device is the future."

Brian Hoyt, spokesman for Austin, Texas-based RetailMeNot.com - a site and app that helps shoppers save money by offering coupons and rebates with more than 50,000 retailers - said more people are shopping through mobile devices, and digital gift cards offer value, "especially when these gift cards are offered to consumers in a way where they can get more for their money, such as $100 worth of product for a $90 gift card."

sparmley@phillynews.com

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