Traditional, plastic, gift cards are extremely popular, especially around the holiday season when many consumers buy a gift card as an easy gift alternative.

However, digital gift cards look set to overtake traditional gift cards as the market continues to expand at an increasingly rapid rate.

Giving a gift card is an easy solution when shopping for gifts at any time of the year, especially for someone who is difficult to buy for as they allow the recipient to essentially choose their own gift.

The majority of retailers now offer plastic reloadable gift cards which function in much the same way as a prepaid debit card, albeit limited to one particular merchant.

It is possible to give the gift of coffee from Starbucks, office supplies from Staples or clothing from GAP. There are gift options available for almost every high street store. Last holiday shopping season, around $91 billion was spent on plastic gift cards.

However, a recent study by consulting firm Urban Wallace Associates who are based in Lexington, Mass. shows that the market for digital versions of these gift cards has doubled in the past three years and the prediction is that consumers are ready to leave plastic behind. Senior Editor of Incentive Magazine, Leo Jackson said,

Simply put, digital gift cards are easy. They are easy to distribute via email and digital gift cards can be used online, at home, at work or even from a Smartphone so there is no need for the user to trek to a bricks and mortar store.

Digital gift cards are protected by many of the same rules that their plastic counterparts are. They must adhere to the regulations set out by the Credit CARD Act of 2009 requiring retailers to disclose information about fees and limitations that apply to the gift card. Digital gift cards also have many unique features which also contribute to making them more attractive to consumers.

For example, it is much easier to replace a lost digital gift card via e-mail because the retailer can instantly void the lost redemption code and issue a new one. In addition to this, digital gift cards are much more environmentally friendly since often the retailer can simply scan a barcode or key in a redemption voucher directly from a Smartphone. Even if the digital gift card must be printed out, this is still more environmental friendly than plastic cards.