Top Takeaways From an Analysis of Retailers’ Gift Card Programs

The 2017 Merchant Gift Card E-Commerce Evaluation Report, sponsored by CashStar, is the analysis of the assessment conducted by NAPCO Research from July 2017 through August 2017. The cross-platform assessment evaluated 100 top merchants from the U.S. and Canada across several categories on 98 criteria, including the consumer purchase and recipient experience of digital and physical gift cards, as well as the availability of merchant B-to-B programs and the use of gift cards for marketing initiatives.

This year, gift cards are forecast to be a $160 billion market by the CEB TowerGroup. This may be of no consequence to the casual observer, but it does seem reasonable given that gift cards have been the most requested holiday gift by consumers for the past 11 years, according to the National Retail Federation. With many retailers feeling the pressure of declining traffic and sales, consumer affinity for gift cards present opportunities for merchants to effectively leverage online sales of gift cards to drive revenues.

As the recently released NAPCO Gift Card E-Commerce Evaluation Report indicates, some merchants are already successfully executing robust gift card programs to best take advantage of the market opportunity. However, there’s still much more that merchants can be doing better. The overall average score of all brands included in the study was just 42 percent. Brands need not look far for ideas on how to improve their offerings. The evaluation reveals several trends that merchants can learn from to boost their gift card programs:

Omnichannel Hasn’t Made it to Gift Cards Yet

Only 36 merchants evaluated sell both digital and physical gift cards in all of their available e-commerce channels (desktop, mobile web and for some, mobile app). Even for merchants that sell in all available channels, the mobile experience is not generally at parity with their desktop experience. Only three included in the evaluation have mobile purchase experiences that score equal to or better than their desktop experiences, and scores on average for these 36 omnichannel merchants drop from 59 percent on desktop to 47 percent on mobile web and 45 percent on mobile app.

Too Many Errors in Purchase and Delivery

There are more problems with purchase and delivery of gift cards than one would expect. Sixteen of the brands evaluated that offered gift cards for sale online failed somewhere in the purchase or delivery process for digital and/or physical cards. Of these 16 brands, 10 seemed to have successfully processed the purchase but the cards were never received, even after contacting customer service. For the remaining six, issues arose during the purchase process that prevented the order from going through, even with customer service intervention.

Opportunity in B-to-B Sales

The sale of gift cards to other businesses appears to be an opportunity area for many brands. While Mercator Advisory Group finds that B-to-B accounts for more than…