For holiday shoppers, gift cards are the easy way out. They’re light. They’re quick, and bound to delight. They’re also problematic on a few levels, as I noted several years ago. When you buy gift cards, you’re lending money to retailers for free. And when gift cards go unused, the money spent purchasing them goes to waste.
Gift cards are also wasteful in another way. They’re made of environmentally unfriendly plastic and consume a lot of resources. And when they’re discarded, they often wind up in landfills.
Just as shoppers, grocers and stores are switching from plastic to paper bags, so, too, are some shifting from plastic to paper gift cards. “In 99 percent of the cases, gift cards get used in the first year of their life and then are thrown away,” said Johan Kaijser, head of sales at Sustainable Cards, a company with operations in Sweden and Boulder, Colorado (where else?) that makes gift cards out of wood. While small, these cards can pile up. There are about 30 billion in the world, and it is inefficient to recycle them. “If you do the math, it is like 150,000 tons of PVC plastic,” said Kaijser. And most of that is going to the landfill or getting burnt.”
The most energy-efficient means of doing gift cards would be simply to send them as digital apps. But as mobile payments systems rise, gift cards are holding on. In fact, sales are rising. Last year, according to CEB Tower Group, sales of gift cards amounted to $110 billion, up 10 percent from 2011. People still like handing over gifts personally. And, ironically, some of the biggest e-commerce companies—iTunes, or Spotify, or Amazon.com—maintain large plastic gift card programs because they want to have a tangible physical presence.
So long as gift cards are trading hands, it makes sense to try to produce them more sustainability. “We need to push the producers to offer more environmentally sound materials,” said Kaijser. Sustainable Cards uses a Nordic birch veneer, and then layers on a cellulosic paper structure. The cards can also be coated with a thin corn-based plastic overlay. Just like plastic cards, the wood-based cards bend, and can be embedded with magnetic stripes or barcodes. Once used, the cards go through the same kind of lifecycle as the plastic card—except they biodegrade more quickly and don’t release as much toxic stuff when they do so. The cards that are entirely wood can be composted. As a result, “they have about 50 percent of the environmental footprint,” said Kaijser.
Of course, as is often the case, there is a price to be paid for sustainability. Depending on the volume of an order, the wood cards can cost between 10 and 15 cents per card, while PVC cards can be as cheap as 7 cents for large volumes. For smaller volumes, Kaijser said, the differential between wood and PVC is about 10 percent.
This is a small but, um, growing business. Sustainable Cards was founded in 2006, produced its first cards in 2010 and has doubled sales every year since then. With 15 employees, it has revenue of about $2.5 million per year. Customers include hospitality chains like Hilton and Four Seasons, which use them for key cards; airlines and rail customers, which use them for loyalty program cards; and retailers like the Body Shop and Starbucks. Because customers tend to hold gift cards, key cards, and loyalty cards in their hand, they can be an integral part of companies’ own sustainability messaging.
Whole Foods also uses Sustainable Cards. At the high-end food retailer, gift cards are a year-round business—kind of like a pre-paid debit card for expensive groceries. The company says it was led to wooden cards by the same ethos that impels it to seek out apples from Washington and cheeses from Wisconsin. “We really try to understand the source and the background of every product that we sell,” said Chris Jensen, coordinator of promotional commerce at Whole Foods. Several years ago, it concluded that PVC wasn’t a great source for its gift cards, and in 2011 it switched over to paper-based cards and wood cards.
This year, Whole Foods has partnered with Jason Middlebrook, an artist who works in wood substrates—to design wooden cards produced by Sustainable Cards. “We have the responsibility to think through every product we buy and sell,” said Jensen. “And that includes gift cards.”