You are currently viewing 8 Reasons 2021 is the Year of Digital Gifts

8 Reasons 2021 is the Year of Digital Gifts

Thinking of skipping every other type of holiday shopping altogether and going right for digital gifts? It might not be your first instinct — they seem so impersonal, after all. However, digital gift-giving is on the rise and nobody will bat an eye if you give them a digital gift. In fact, digital gifts might be exactly what your loved ones want and even ask for!

Growth in physical gift cards grew 9% in 2019 and 2020 but digital gift card adoption should grow 23% by 2025, more than two times faster than overall gift card sales, according to Businesswire. COVID-19 has accelerated the trend as mobile and digital gifting increases.

But what about other digital gifts? Should you splurge on digital gifts all the way or go the traditional route? Let’s go over some reasons to consider digital gifts and walk through some suggestions as well.

Reasons to Consider Digital Gifts for the Holidays

Why consider digital gifts for the holidays? Let’s count the reasons.

Reason 1: Shipping delays continue to impact gift buyers.

The theme of holiday shopping 2021: Delays and shortages. Due to the pandemic, labor shortages and jammed shipping ports, holiday shipping delays and product scarcity will only continue to get worse as we creep toward the new year. In fact, it might already be too late to order actual gifts for the holiday season. You’ll be forced to choose a digital gift anyway, so you might as well seriously consider it.

Reason 2: You can control how much you spend.

You can put the right dollar amount on your gift when you choose your own digital spending amount. For example, let’s say your nephew wants an expensive game for Christmas. You can get an online membership so he can play games with people on the internet for a collaborative gaming experience. Look into these streaming options on Xbox, Playstation, Steam and Nintendo.

Reason 3: It’s faster.

How much time do you really want to spend hemming and hawing in store aisles? Right. We assumed you didn’t want to do that at all, either. Buying eGifts and online vouchers gives you a quick approach to buying gifts. You’ll have all of the presents for those on your list, lickety-split.

If you feel a bit guilty about not making it “personalized,” remember that technology has made it possible for eGifts or vouchers to feel as personalized as store bought gifts, especially if it’s for a brand that your friend or family member truly loves.

Reason 4: Loved ones can make their own purchasing choices.

When you’re not sure about the exact gift. For example, if your niece wants a certain type of hair product but a brand has an absolutely mind-boggling array of choices, you can let her choose exactly what she wants instead of making a mistake and having her go through the hassle of returning a wrong product — not to mention, you don’t have to keep track of a zillion receipts.

Specific product details might seem like your worst nightmare.

Reason 5: You can encourage investing.

Tell your niece or nephew that you bought their gift with digital currency, like Bitcoin, and you’ll suddenly be the coolest aunt or uncle ever. If you buy a virtual gift card with cryptocurrency, it introduces them to the idea. Buy a book about cryptocurrency or investing and encourage your favorite youngster to consider new ways to invest in blockchain technology or emerging companies. It could change your favorite young one’s life.

Reason 6: You can give the gift of education.

Along with the idea of investing, why not consider investing in your favorite youngster’s education? It’s one of the most valuable gifts you can give. Consider opening an account in a 529 plan in that child’s name. Anyone can open a 529 plan for any beneficiary, whether you’re investing in your child, grandchild, niece or nephew.

The benefits of a 529 plan go on and on:

    • Federal and state tax breaks: You can get both federal and state tax breaks for investing in a 529 plan.
    • Age-based options: You can choose an age-based investment plan for your child. For example, if you start saving when your child is six months old, you can choose a more aggressive 529 plan option for your child. You can choose to get more conservative with your investment the older the child becomes.
    • No income-based restrictions: Unlike some types of investments (like a Roth IRA, has income restrictions so that those above a certain amount cannot invest), anyone can invest in a 529 plan.
  • Prepaid tuition: Some 529 plans offer a prepaid tuition option, which means that you can prepay for college tuition in today’s dollars and ultimately pay less when your child goes to college.
    • Many state options: You can tap into many different state’s 529 plans, so there’s flexibility in your choices. However, note that you might not get state tax benefits if you don’t choose the 529 plan offered by your state.
  • Option to change beneficiaries: You can easily change your beneficiaries with a 529 plan. If the child named as your original beneficiary chooses not to go to college, you can remove him or her as the beneficiary and you can choose another individual instead.

Reason 7: You can invest for long-term benefits.

Take this stat to heart: According to a recent UNest/Harris Poll Survey, 75% of respondents said they prefer money in lieu of physical gifts for their children.

You may also want to consider purchasing stocks for kids, which you can do through a custodial brokerage account, called a Uniform Transfer to Minors Act (UTMA) or a Uniform Gift to Minors Act (UGMA) — the actual name depends on the type of account your state offers.

When your favorite beneficiary turns 18 or 21, depending on your state’s rules, your child gains full control of the money. However, this can be a major downside to an UGMA or UTMA, because kids can spend all the money how they want, no matter how much you beg them to use the money responsibly.

UNest makes it easy to invest in a flexible tax-advantaged custodial account. Family and friends can even contribute funds to your child’s UNest Investment Account for Kids through a shareable gift link — another great idea for relatives to contribute instead of cluttering up your child’s toy room.

You’ll also get tax advantages through UNest: Up to $2,200 in annual earnings in a UNest Investment Account for Kids receives tax advantages. The first $1,100 of earning grows completely tax-free. The next $1,100 is taxed at the child’s tax rate. Anything exceeding $2,200 is taxed at the parents’ tax rate. Keep in mind that these amounts only pertain to gains in the account, not to the original contributions.

Reason 8: Digital gifts avoid clutter.

Consider digital gifts instead of regular gifts for the sheer clutter-avoidance factor. Consider the following options instead: streaming service subscription, online class, virtual scrapbook options, museum passes, digital publication subscriptions, software download, eReader gift cards, food delivery, language courses, travel gift cards and more.

Can you think of any other options for your loved one?

How to Shop for Digital Gifts

Take a look at a few steps you can take to shop for digital gifts for not just your favorite kid — but anyone on your list.

Step 1: Make a list of your loved one’s favorite things.

Consider your loved one and his or her favorite things. If you don’t know, ask! Don’t guess at what they want or need. Their parents, brother, sister, cousin or friend might be able to give you some more clues as to which types of digital gifts will fit the bill.

Step 2: Consider your budget.

How much do you have to spend? Your budget may only allow for a small amount of money per person, but remember that it doesn’t take much to make an impact. UNest allows for contributions of just $25 increments.

Step 3: Make your purchase and send.

Decide what you want to buy, input your credit card information (or use cryptocurrency!) and make your purchase. Make sure you have your loved one’s email address handy so you can send them their gift information in a jiffy. Best of all, you can choose when you want to make your purchase, just in case you want it to occur right on Christmas Day or on the first day of Kwanzaa.

Consider Digital Gifts this Year and Beyond

Digital gifts aren’t going away. In fact, they’ll probably just continue to get more pervasive as the years pass. Embrace the technology (and your younger counterparts who also love technology!) and consider digital gifts for their ease and budget-friendly options. Also consider choosing digital gifts for opportunities to help children get interested in investing and also to provide money for education — both will pay dividends for your favorite kids’ futures.


This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.