Home Depot Launches a First—Videos for Virtual Gift Cards

A new electronic gift card launched by The Home Depot Inc. that lets customers upload and send video images—apparently the first such card in the market—is performing reasonably well in the early going for the huge home-improvement chain. “It’s a little bit early, but it has met expectations so far,” Michael Homiak, director of incentives, tells Digital Transactions News.

With the new card, customers can send an existing video or create a new one with a digital camera or a Webcam on their computer. They upload the video as they buy and load value on the card, then send the product either to an e-mail address or to a recipient’s Facebook page. The message renders the video as a box within the page, with the characteristic arrow inside the opening image to start animation.

“This is definitely a first,” says Nikki Baird, a managing partner at Miami-based Retail Systems Research who follows merchant gift cards, in an e-mail message. “I think it will be popular. A gift card by its nature is impersonal, and this lets people add that personal touch back in.”

While Homiak will not disclose sales numbers, he says that the ability to send videos will become a permanent feature of the card, though the product was introduced Oct. 28 to take advantage of the upcoming holiday season. “It’s still a relatively small portion of our overall [gift card] sales, but it’s growing,” he says. He adds a conventional plastic gift card that the chain launched for Father’s Day that also allows customers to send videos has logged surprising results. “Since Father’s Day, we’ve seen there’s high demand for it across all occasions, such as a graduation or a new home,” he notes. “That’s been a pleasant surprise.”

Homiak sees the performance of this card boding well for the new virtual product with video capability. The plastic card is available only at Home Depot stores, unlike the company’s other cards, which consumers can also buy at so-called gift card malls inside other stores. Recipients use a special code assigned by Home Depot to access the video online. “We’re really pleased with the way the plastic version has performed in our stores for the last three to four month,” Homiak says. “We felt [the virtual card] was a natural extension of our plastic product.”

The new product comes as consumers are apparently expressing an increasing preference for virtual gift cards, which are prepaid products they can buy online and then send via e-mail to recipients. Some 74% of consumers choose virtual over plastic gift cards, according to Giftango Inc., a Portland, Ore.-based vendor of gift card fulfillment services to merchants (Digital Transactions News, Sept. 1).

The new card, for which Home Depot uses the services of Portland, Maine-based fulfillment and incentives provider CashStar Inc., also bolsters what was already a strong position for the chain among merchants that issue gift cards. A report released this fall by RSR ranked the chain first among 50 large merchants that offer virtual cards (Digital Transactions News, Sept. 23). The report examined a number of card criteria, including personalization. “This would only have strengthened their ranking,” Baird says of the new video feature.

Encouraged by the performance of the video feature so far, Homiak says without being specific that more innovations are in store for Home Depot gift cards. “It’s safe to say we’ll be introducing some nice consumer options,” he says.