If you’re like many retailers, you treat gift cards as a product — with product leads and inventory planning priorities. If this is true for your business, you’re in need of a gift card strategy refresh. Why now? Today’s advancements in payments tech and digitization mean that your gift cards can (and should!) be so much more than just a gifting product. New gift card capabilities and use cases bolster your company’s marketing, commerce, and loyalty initiatives with new use cases and technology applications.
In our newly published report, The State Of Gift Cards And Stored-Value Solutions In Retail Payments, we address the traditional approach to gift cards and explore how retailers can leverage new use cases to build out a new and improved gift card strategy. Here’s a peek at some of the hottest use cases:
- Stored-value systems to keep money in your own ecosystem. Per Forrester’s November 2022 data, when they’ve received a refund or credit, 47% of US online adults have received a store credit in the form of a gift card instead of reimbursement to their original payment method. By encouraging store credit in the form of a gift card over a refund, you encourage repeat purchases and customers. The same is also true for customer service mishaps. Rather than refund customers who run into order issues, quick-service restaurants or retailers can credit customers’ accounts via their apps or online experiences.
- Reloadable closed-loop programs that marry gifting and loyalty. Marketing and loyalty teams can incorporate promotions with gifting or use a prepaid program specifically for customer self-use and tie in perks and rewards. Examples include the Starbucks card program as well as loyalty programs where members earn e-credits such as Bloomingdale’s Loyallist reward cards and Nordy Club “Nordstrom Notes.”
- A digital gift card program to complement your existing gift card program. Virtually issued cards often allow consumers to redeem them wherever the underpinning payment networks are accepted (e.g., Mastercard, Visa). These virtual cards let you issue one-time or multiuse cards instantly and fund the cards at the point of sale. In addition to the convenience factor for consumers (virtual cards can be stored in digital wallets), you as the retailer can assert relevant restrictions or controls on how and when they can be used.
For more insights into how you can shift from gift card product to a gift card strategy mindset, please read the full report here. If you’re a Forrester client, be sure to get in touch with your questions about gift card strategy and use cases that make the most sense for you and your business in the year ahead.