Assessing Merchant Gift Card Programs and Actionable Best Practices

Blackhawk Network, a California-based company in the prepaid, gift card, and payments industry, joined forces with NAPCO Research, the “research arm” of NAPCO Media, a B2B digital media company, for the fifth year. Their aim? To assess the in-store, online, and mobile gift card program experiences across more than 225 merchants. This time, their annual research has extended beyond the U.S. and includes the UK and Australia for the first time.

The findings of the “2022 NAPCO Research Merchant Gift Card Omnicommerce Evaluation” report were discussed by 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.

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Assessing Merchant Gift Card Programs and Actionable Best Practices

PaymentsJournal Assessing Merchant Gift Card Programs and Actionable Best Practices

The pandemic accelerated digital transformation within businesses and Dunckelmann believes that this study could not be timelier:

“One of the reasons I really liked this study, especially that you’ve got research that goes back for five years, the trend in the report really shows much more of an emphasis on digital, especially with what’s happened in the pandemic, and more businesses looking for digital options. I think it’s really smart to help vendors understand their digital experience and what they can do to improve it. So, I think, although this is the fifth year, it’s certainly very timely in terms of results.”

Solomon spoke favorably about this study as well, adding:

“It really creates a framework not only for a customer that has an existing program to expand on their program and take it to the next level. But someone who’s entering the business, it shows you the roadmap of what some of the most successful companies are doing. And they can implement those ideas without having to do trial and error. So it just creates a great, great roadmap for our customers and our potential customers.”

The Methodology

To conduct the study, the NAPCO Research team visited each merchant store, visited the websites, accessed the mobile apps, and purchased the gift cards. All these experiences were assessed using more than 150 criteria, which have been developed and amassed during the last five years of conducting this annual study.

Some of the criteria explored include:

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

Key Findings and Biggest Takeaways

Based on the research findings, the multinational average Total Omnicommerce Score is 66% across the 225+ merchants assessed. This indicates there is considerable opportunity to enhance gift card programs across the various industries, verticals, and regions.

Retailers are also keen on investing in providing a variety of payment methods based on what customers prefer to use. Also, a rise in purchasing gift cards for personal use has also increased the need for more expedited purchases to benefit self-use purchasers.

Despite the rise of mobile use, the overall mobile experience still is underdeveloped.

As more customers become “mobile first,” it would be critical to invest in the mobile space to refine both the purchaser and recipient experience.

In all the regions featured, it is important that merchants provide a seamless, in-store experience for customers. This can include having gift cards in stock, a knowledgeable staff, and new payment options available for customers.

When it comes to the online experience, the key is to make the card program easy to locate. Having the most well-developed gift card program will not translate into sales if gift cards cannot be found by customers.

Spidaliere expounded further on this:

“… one of the key takeaways across all three regions was making sure that your program is easy to find. 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. So, 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, [and] making sure your customers as well as new prospective customers know about your program and how to purchase a card.”

Customization is also a key driver. Customers want to make the gift card experience more personal. They want to have access to design options as well as custom message spaces, and they also want to select the denominations and the timing.

In-Store, E-Commerce, and Mobile Gift Card Program Performance by Region

When it comes to in-store gift card program performance, the U.S. comes out on top. The findings show that in-store, U.S. merchants excel at having both well-stocked and tidy fixtures and check stands.

The UK and Australia excel in mobile and e-commerce. With Australia scoring the highest Omnicommerce score, at 69%, its strength lies in both digital and mobile capacity. This includes its site search, payment options, and personalization options. Australia also provides the most robust desktop gift card purchasing experience.

The UK continues to outshine in its mobile experience. This is especially true in its mobile gift card programs. It is recommended that the UK should really lean into this space as more consumers than ever are opting to shop via their mobile phones.

Opportunities for Growth

As the holiday season approaches, retailers would do well to take advantage of all the key findings in this report. Some recommended action items to improve the gift card program experience include the following:

  • Ensure gift cards can be easily found
    This includes all selling channels (in-store, digital, app). Facilitate gift card purchases by positioning them more visibly for customers to find them.
  • Be flexible with your gift card program
    Offer both physical and digital cards. Provide cross-channel purchasing (e.g., buying digital cards in-store, buying physical cards online). Sell multibrand cards as well as your own brand’s gift cards, and offer various payment and delivery options. Be flexible with denominations, where customers could choose the card’s value. Feature advanced personalization, such as personalized messages, a variety of faceplate designs, and the capability to upload photos.
  • Deliver a fast, seamless, and secure purchase experience
    This includes providing a variety of payment method options. Provide the purchaser with a notification of when their gift card has been shipped or received.
  • Enhance the gift card recipient experience
    Make it effortless for the recipient to add their gift card to a digital wallet and to redeem it. Have a way for them to check their balance, add more funds to their card, and securely access their gift card.

To learn more about the latest industry trends, best practices, and where your gift card program stands, get your copy of the fifth annual 2022 NAPCO Research Merchant Gift Card Evaluation – U.S. Edition. You can DOWNLOAD IT HERE.

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