Oct 06, 2022

The Latest Evaluation of Merchant Gift Card Programs and What It Means

When a global gift card and payments leader joins forces with a leading B2B research company, the results are always interesting. This was indeed the case when Blackhawk Network worked with NAPCO Research for the fifth year in a row to evaluate merchant gift card programs. This year, for the first time, they reached beyond the U.S. to include the U.K. and Australia.

The findings were the subject of a PaymentsJournal podcast featuring Amy Dunckelmann, VP of Research Operations at Mercator Advisory Group; Andrew Solomon, Vice President of Sales at Blackhawk Network; and Hilary Spidaliere, Director of Product Marketing at Blackhawk Network.

With the pandemic-induced increased adoption rate of all things digital by consumers and businesses, the timing of this study, according to Dunckelmann, could not be better. "One of the reasons I really liked this study" she said, "is that you have research that goes back for five years. The trends in the report really show much more of an emphasis on digital" Dunckelmann continued, "I think it’s really smart to help vendors understand their digital experience and what they can do to improve it. So, although this is the fifth year, it’s certainly very timely in terms of results"

The Methodology

This annual study is extremely thorough. The NAPCO Research team visited stores of each merchant, went to their websites, accessed their mobile apps and went through the gift card purchasing experience. Everything was assessed using more than 150 criteria, which have been developed and fine-tuned during the last five years of this study, then scored based on those assessments.

Some of the criteria examined include:

  • How easy is it to locate the gift cards?
  • What gift card art designs are available?
  • What denominations are available to purchase?
  • Is it possible to add a custom message?
  • Does the order go through quickly once purchased?
  • Does it feel like a gift when received?
  • Are the gift cards easy to redeem?

Key Findings and Takeaways

One of the key scores noted in the report is the Total Omnicommerce Score, an indication of gift card program success (or not) among all categories, including in-store, online and mobile. A low score indicates there is considerable opportunity to enhance a gift card program; a high score indicates a merchant is doing almost everything they can to maximize their program. For merchants not in the research, the research reveals dozens (if not hundreds) of insights, tips and lessons on potential program improvements.

Based on the research findings across 225+ merchants, the multinational average Total Omnicommerce Score was 66%.

Here are some other key findings and takeaways:

Retailers are looking into providing more payment methods to match up with what today’s customers want. There’s also a notable rise in gift card self-use, so retailers see the need to make gift card buying faster and easier for these consumers.

Although there has been a rise in the use of mobile devices, the overall mobile experience still is underdeveloped. For retailers, this means an investment in the mobile space to refine both the purchaser and recipient experience is not just important, but critical.

In all three countries included, the research shows it's important for merchants to provide a seamless, in-store experience for customers. This can mean any and all of the following: making sure you have gift cards in stock, having a well-trained staff and providing new payment options for customers.

The online experience, however, is all about making the gift cards (gift card program) easy to find. Spidaliere correctly pointed out, “You could have the best gift card program in the world, but if a customer can’t find it, you won’t be able to sell any gift cards. This is making sure it’s easy to find the gift card program on your homepage, as well as making sure you’re promoting it out through email and social media.”

Solomon added that card customization is also a key driver. “Customers want to make the gift card experience more personal,” he said. “They want to have access to design options, as well as space for custom messages.”

How the Regions Differ

Different regions and countries, as you would expect, have different strengths and weaknesses. Looking at the in-store gift card experience, for example, the U.S. leads the way. U.S. merchants excel at having both well-stocked and well-maintained fixtures and checkstand displays.

The U.K. and Australia came out on top in terms of mobile and eCommerce. Australia had the highest Total Omnicommerce Score at 69%, with strong showings in both the digital and mobile spaces. Some of these criteria included site search, payment options and personalization options. Australia also came out with the most robust desktop gift card purchasing experience.

The U.K. also outscored the other two countries with their merchants’ mobile experiences, especially their mobile gift card programs. As more consumers shop with their mobile phones, it’s recommended that the U.K. really lean into this strength.

Action Items

The holiday season is approaching, giving retailers an opportunity to take advantage of these findings and improve their holiday gift card program experiences (which will, in turn, increase gift card program revenue). Recommended action items include:

  • Ensure gift cards can be easily found

Take a good look at all selling channels (in-store, digital and app). Place displays, ads and messaging in places customers can't miss.

  • Be flexible with your gift card program

Offer both physical and digital cards and provide cross-channel purchasing (e.g., buying digital cards in-store, buying physical cards online). Sell multibrand cards alongside your own brand’s gift cards. Provide more payment and delivery options. Include and communicate advanced personalization, such as personalized messages, a choice of faceplate designs and adding photos.

  • Deliver a fast, seamless, secure purchase experience

Make sure you have the best gift card platform, and provide a variety of payment method options. Send customers notifications when their gift cards have been shipped or received.

  • Enhance the gift card recipient experience

Enable the recipient to easily redeem their gift card or add it to their gift card to a digital wallet. Give them a way to check balances, add more funds to their card and manage their card securely.

Read, Hear or See More

To hear the entire PaymentsJournal podcast, click here. To see the complete NAPCO Research report, the U.S. regional report or a video of a webinar covering the material, go to this Blackhawk Network web page.