The global market for gift cards is truly massive, and is estimated to reach more than $1.3 trillion USD by 2028. Consumer demand for online gift cards continues to grow for many reasons, and it’s important for businesses to accommodate these trends or risk losing ground to competitors. Managing online gift cards for your business can be easy, but it requires the right payment processing technology in order to maximize the benefits.
Businesses often have many different objectives they are striving to achieve with their ecommerce website. These may include such goals as boosting total revenue, increasing purchase frequency among existing customers, and attracting new customers. In any case, it can certainly be challenging to determine the right actions needed to meet those goals, let alone find a solution that works to achieve more than one at a time. It may surprise you to learn that gift card initiatives have been shown to be an effective way to do just that, and modern digital gift cards are taking this to the next level.
Gift cards are either used by people who have purchased from your business before, or those who are shopping with your business for the first time. If they are repeat shoppers, gift cards can work to increase their return rate, raise their average order size, and elevate their total lifetime customer value. If they are new shoppers, they are experiencing your brand with fresh eyes. This is the ideal time to entice these customers to sign up for email lists, join loyalty programs, and encourage other actions that will build their affinity for your brand and increase the likelihood of repeat purchases.
With the ever-growing size of the global gift card market, this is one opportunity that should not be ignored. In fact, there are several other notable advantages that can be obtained by increasing the emphasis on gift cards in ways that are beneficial for businesses, as well as for customers.
Advantages of Offering Online Gift Cards to Customers
Offering gift cards to customers in various forms is nothing new, but the mechanics of how gift cards work has changed dramatically in recent years. Instead of physical cards that must be swiped or scanned using an in-store POS system, modern gift cards are much more flexible in how they can be purchased and redeemed. In many cases, physical cards are not even used anymore. Instead, they’ve been replaced by digital versions that can be accessed using smartphones, tablets, or connected PCs. With the right system, digital gift cards can be redeemed just as easily in-store as they can on your ecommerce website.
With digital ecommerce gift cards, there’s reduced need for physical cards, as they can be delivered to the recipient instantly by email or instant messaging, anywhere in the world. This digital delivery format also means that there’s far less chance that cards can get lost or stolen. Digital gift cards can simply be stored in the recipient’s email archive, or accessed at any time in the customer’s account for redemption at a later date.
Another advantage of digital gift cards is an increase in payment processing speed. Codes can be entered quickly using embedded links in emails or instant messages that automatically apply the connected gift card to the customers online ecommerce shopping cart. QR codes also make fast access to gift cards possible, pulling up the card details after a quick scan with the smartphone camera app. These features of digital gift cards help speed up the transaction process and reduce the chance for human error when entering redemption codes.
In addition, the ability to store digital gift cards on a smartphone aligns with the increasing adoption of digital wallet payment apps by many consumers. Smartphones are rapidly gaining popularity as a standard method of payment thanks to the widespread use of apps like Apple Pay and Google Pay. These apps make it fast and easy to select from multiple different payment card options with just a few taps, with no physical cards required to complete transactions. Similarly, gift card smartphone apps make it very quick and simple for customers to redeem and manage digital online gift cards without any need to ever handle physical cards.
What Systems Are Needed to Manage Online Gift Cards?
It’s clear that the need for a digital gift card offering is essential for retail businesses, but it may not be something that existing ecommerce systems are capable of managing in their current configuration. Depending on the type of ecommerce payment processing system your business has in use, there may be different options available to you that can enable this functionality.
Enabling Gift Card Functionality on Existing Ecommerce Platforms
Bringing online gift card functionality to your business may very well be as easy as enabling the existing gift card plugins of your ecommerce website. It’s entirely possible you’ve already been provided with these functions, but have simply never set them up to take advantage of them. If you’re unsure of whether your existing system has these capabilities, we recommend you contact your ecommerce payment processing provider to review the options available in your current setup.
Some ecommerce platforms are equipped with value-added apps that can be enabled to perform a wide range of functions, including gift card management, but they may require extra fees to access these particular features. It’s also worth noting that not all gift card apps will have the same capabilities. Some may be quite robust and powerful, while others may be very rudimentary and basic. Be sure to review the available options thoroughly to get a clear understanding of what the app can and can’t do.
Online gift card management tools should at least provide the following features:
- Create online gift cards and deliver to recipients digitally.
- Accept payments to purchase ecommerce gift cards.
- Redeem online gift cards as ecommerce payments.
- Manage card balances and update card expiry dates.
- Online customer portal for viewing card and account details.