What is a gift card?

A gift card is a prepaid payment method that allows the recipient to make purchases up to the card's value at a specific retailer or group of retailers. After we’ve covered the gift card definition, let’s take a look at its main types.

Types of gift cards

• Closed loop gift cards. Only redeemable at the issuing brand or retailer (e.g. a Nike gift card).
• Open-loop gift cards. Created by banks or payment networks (such as Visa or Mastercard gift cards) and can be used at different merchants.
• Digital gift cards. Sent and used electronically, often via email or mobile apps.
• Physical gift cards. Standard plastic cards are used either in-store or online.

Benefits of offering gift cards

• Boost revenue. It frequently results in increased order values as the clients use more than the card balance.
• Drive loyalty. It encourages multiple purchases and recurring visits.
• Gain new customers. Gift cards can bring in new visitors who later become loyal customers.
• Simplify gifting. This will attract gift-givers who want a quick and flexible solution.

Best practices for using gift cards in ecommerce

• Promote gift cards on homepages, through emails, and at seasonal events.
• Use gift cards together with discounts or loyalty points to make them more attractive.
• Highlight gift cards to help those who cannot make up their minds or those shopping on behalf of an organization.
• Ensure gift cards are easy to find and purchase across all devices.
• Allow personalization with special messages or themes of design.
• Display gift card balance and usage history in the customer account dashboard.
• Send automated reminders or follow-up emails to encourage someone to use the gift card.