Stop making this common mistake when setting up a gift card programme

By Prerna Sonawane, VP Partnerships MENA, Merit Incentives


We all know that Gift cards can be a simple way to increase sales, attract new customers, and deepen relationships with existing ones.

Half of US businesses use gift cards annually to invest $22.7 billion annually. And the gift card market now accounts for more than $210 billion in consumer spending (source).

Once considered a last resort for gift-givers who couldn’t find an appropriate present, gift cards are now the most popular form of gift and the one most requested by gift recipients. Many major card issuers like Visa, MasterCard, and American Express offer prepaid gift cards that allow recipients to use the card to purchase an item from any retailer that accepts credit cards from the issuer.

However, new data (source) reveals that “closed loop cards” issued and accepted by specific merchants are increasing in popularity. What is the opportunity for high street brands?

For small business owners, this shifting preference for closed-loop gift cards presents an opportunity to compete with national brands and use local presence to appeal to shoppers who want to give a gift that feels relevant, personal, and thoughtful.

Most gift card recipients spend nearly 40 percent more than the face value of the gift card they receive (source). When you strategically issue gift cards in denominations, most likely to attract gift-givers based on the occasion, you increase your marketing program’s efficacy while influencing your average order value for gift card sales. Unlike the physical items you sell as gifts, gift card sales don’t result in exchanges or refund requests post-sale. Furthermore, gift cards are a way to attract new customers to your business, encourage regular customers to spend more, and even reward your most loyal patrons.

For small business owners, these inherent aspects of gift cards are a win-win for maximizing profitability and reducing the likelihood of lost sales, customer complaints, and chargebacks.

Worldwide, we know that most gift card sales take place around Christmas; birthdays trigger almost half of all gift card sales; nearly 20 percent of gift card sales are bought as a “thank you” act (source). When you structure gift card marketing programmes to align with such occasions directly, you can inherently position your brand as a year-round gifting destination.

But the common mistake brands usually make is focusing on the transactional aspect and forgetting what it means to the consumers.

By setting up a gift card programme, brands become part of emotions, social connections, and much more. It becomes a fantastic opportunity for retailers and merchants to create and strengthen the emotional relationship with their customers by using gift cards as a core element of the brand marketing strategy.

That said, the technology needs to be there to support companies of any size wishing to launch their own gift card programme digitally or physically. (link here) was launched by Merit Incentives with the idea of making this opportunity possible instantly for any business owner, from a small coffee shop to high street brands. The SaaS self-onboarding platform with its “pay-as-you-go” model can help play a pivotal role in improving brand marketing strategy.

The post-COVID period has made some adjustments to the specifics of gift card delivery, significantly expanding the online arena for digital gift cards. And the undoubted potential is reflected in omnichannel solutions, thanks to accessibility, speed, and choice. Specialists point to the provision of “phygital” as a way to maximize online offerings, as consumers get the chance to choose between physical and digital card formats. Such a card is a rather personal gift, and the recipient is equally respectful to receive it both by e-mail and in physical form, wrapped in premium packaging. The choice of format allows companies to reach a wider audience, increasing the chances of converting a non-end user ordering a card into a new consumer.

Undoubtedly, reward programs and gift cards are getting increasingly popular and relevant in the era of working remotely. And according to Merit Incentives merchant survey, should be the perfect choice for companies of all sizes with various locations around the world and different currencies, looking to improve their marketing performance, grow their audience, and generate more revenue.

About the author:

With over a decade of experience in the sales, partnerships, and client relations sector Prerna is a customer, data-centric, and result-oriented specialist with accomplishments in leading and executing comprehensive partner and sales strategies to support business vision and goals. Before joining Merit Incentives in 2018, Prerna worked at an F&B MNC with a love for client relations, data analysis, growth, and strategy. Prerna is also a member of the Women in Incentives network sharing her passion for the reward and loyalty industry alongside other inspiring women.

For more information contact us or visit our websites for Merit Incentives and


Related Posts