The gift card: an essential payment method for your e-commerce

Paying with a gift card

Among the various payment options available, gift card payments are a significant strategic lever for retailers.

Popular with both consumers and businesses, it is a powerful marketing tool that allows you to drive more traffic, attract new customers, increase your average basket size, and build brand loyalty—it’s crucial not to miss out, right?

Key figures for gift card payments

Since numbers sometimes speak louder than words, let’s review the key statistics for this sector. The figure to remember:

An average upsell of 40% : Gift card holders generally spend 1.4 times the value of their card when completing a purchase. Since the user is not the one who paid for the card, they have no trouble adding a few extra euros to treat themselves to an item that exceeds the initial budget. A great way to increase the average basket size!

70% of gift cards are purchased by businesses : Employee works councils (CSEs) are the largest consumers of gift cards. The remaining 30% are individual consumers. This trend is confirmed by the continuous growth of the B2B segment.
Average gift card value: €50
3rd most used payment method in France on e-commerce sites, with one-third of consumers having made at least one purchase using a gift card in the last 12 months.
28% of recipients discovered a new brand thanks to the gift card they received.
A seasonal market : 75% of sales occur in the final quarter, during the holiday season.
Ranked among the top 3 favorite gifts for the French, 60% of employees would like to receive one.
Top 3 sectors:
- Culture - multimedia - home appliances
- Children's products (toys, clothing)
- Home and garden

In 2023 in France, the gift card market represented a volume of 8 billion euros, and 88 billion euros across Europe.

This alternative payment method can account for 5 to 7% of your brand's revenue... which makes it worth dedicating time and energy to optimizing your gift card program.

How gift card payments work

Gift cards offer a multitude of features and benefits for all parties involved. It is important to clearly define your needs and those of your customers beforehand to choose the right provider and determine the best approach.

The parties involved

Several parties are involved when using a gift card:

The gift card purchaser : the person buying the card to give to someone else; they decide the amount, where to buy it, the type of card, and so on.
- The purchaser can be a company: for example, works councils (CSE) providing employees with gift vouchers for specific occasions (70% of cases).
- An individual purchaser buying a gift card for a loved one for a special event.
The gift card user : the person who received the gift card and will use it in a store (in-store or online).
The retailer : they may issue the gift card themselves or participate in a partner gift card program. They are the beneficiary who receives payment via the gift card and pays commission fees to the issuer.
The gift card issuer : a platform for managing gift vouchers, from issuance to redemption, offering a full range of services (key features described below).

Payment workflow

Purchasing the card : A customer purchases a gift card: on the merchant's website, in-store, through a B2B offer, or via a multi-brand platform.
Receipt : The recipient receives the card (physical or digital).
Activation : If necessary, the card is activated in-store or online.
Usage : The recipient uses the gift card for a purchase in-store or online, depending on the available options.
Validation : The payment system validates the available balance and approves the transaction if the amount is sufficient.
Additional payment : If the gift card balance is insufficient, an additional payment can be made using a bank card or any other alternative payment method offered on the website.

Gift card features

The network : single-brand or multi-brand card. You can choose a card dedicated to your brand or join a multi-brand gift card network.
The format :
- Gift voucher
- Physical gift card with magnetic stripe
- Digital e-gift card (email, QR code, mobile wallet)
Omnichannel : usable in-store and on the e-commerce site.
Customization : specific design, amounts chosen by the buyer, expiration date, etc.
Payment management : modifications, cancellations, refunds, bank reconciliation, etc.
International : national, European, or international programs.
Payment flexibility : option to top up payments with a card or other methods, multiple uses, group gifting, etc.

Summary of benefits for merchants

Customer loyalty : offer rewards and share the love for your brand.
Attract new customers : a powerful marketing tool.
Additional acquisition channel : the appeal of B2B cards.
Increase sales : encourage additional purchases.
Event marketing tool : perfect for special occasions.
Cash flow : immediate cash inflow upon card purchase.

Key challenges of integrating gift cards into your checkout process

Despite their many benefits, gift cards present several integration challenges. The sheer variety of providers, features, and formats is where the main difficulty lies.

Technical integration challenges : multiple providers = multiple APIs to manage.
Accounting and management : payment tracking, bank reconciliation, etc.
Interoperability : compatibility with POS systems and e-commerce platforms.
Security : fraud prevention.
Checkout page : maintain a smooth and clear user journey.

Purse makes integrating a gift card program easy for you—join us!

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