Gift Card Program
A Gift Card Program is a structured strategy for selling, distributing, tracking, and optimizing gift cards within a retail or eCommerce business. Rather than simply adding a gift card product to the catalog, a program involves deliberate planning around product offerings, pricing, marketing, distribution channels, fraud prevention, and financial reporting.
Components of a gift card program
- Product design: Deciding on card types (digital, physical, or both), denominations (fixed vs. custom), and any themed or seasonal designs.
- Distribution channels: Selling through your own store, marketplaces, corporate/B2B bulk sales, affiliate partners, or third-party gift card platforms.
- Marketing strategy: Promoting gift cards during peak seasons (holidays, Mother’s Day, graduation), through email campaigns, on-site banners, and social media.
- Fulfillment: Managing delivery for digital cards (email, SMS) and physical cards (inventory, shipping, in-store display).
- Financial management: Tracking outstanding liabilities, breakage, redemption rates, and escheatment obligations.
- Fraud prevention: Implementing velocity checks, code security, and monitoring systems.
- Customer support: Handling balance inquiries, lost codes, refund requests, and disputes.
Key metrics to track
- Sales volume: Total gift card revenue by period, channel, and denomination.
- Redemption rate: Percentage of sold value that has been redeemed.
- Breakage rate: Percentage of value expected to never be redeemed.
- Uplift: How much additional revenue gift card recipients spend beyond the card value.
- New customer acquisition: How many gift card recipients are first-time shoppers.