Gift card payment

Among the various payment options, gift card payment is a considerable strategic lever for retailers.

Praised by consumers and businesses, it is a powerful marketing tool that allows you to both attract more traffic and new customers, increase your average basket, and retain customers to your brand: crucial not to miss out, right?

Key figures for gift card payments

Numbers sometimes speak better than words... let's review the key figures in this sector. The number to remember:

An average upsell of 40% : Gift card holders generally spend 1.4 times the amount on their card when validating their purchase. Since the user is not the person paying for the card, he has no trouble adding a few euros to buy an item that is above the budget. A good way to increase the average basket!

• 70% of gift cards are purchased by businesses : CSEs are the biggest consumers of gift cards. The remaining 30% are private consumers. This trend is confirmed with continued growth on the part of B2B.
• Average gift card amount: 50€
• 3rd payment method used in France on e-commerce sites, with a third of consumers having made at least one gift card purchase in the last 12 months.
• 28% of beneficiaries discovered a new brand thanks to the gift card received.
• A seasonal market : 75% of sales are made in the last quarter, for the end of year holidays.
• In the top 3 favorite gifts of French people, 60% of employees would like to receive one.
• Top 3 sectors:
  • Culture - multimedia - household appliances
  • Children's universe (toys, clothes)
  • Universe: home, garden center

In 2023 in France, the volume of gift vouchers represented a volume of 8 billion euros, in Europe 88 billion euros.

This alternative payment method can represent between 5 and 7% of your brand's turnover... this deserves to devote a little time and energy to optimizing its gift card program.

How does gift card payment work

Gift cards offer a multitude of features and benefits for all actors involved. It is important to clearly define your needs and those of your customers in advance to make the right choice of provider and define the best approach.

The actors involved

Several actors are involved when using a gift card:

• The gift card purchaser : whoever is going to buy the card and give it to another person is the one who decides the amount, the place of purchase, the type of card...
  • The buyer can be a company: the case of CSE who offer their employee a gift voucher for a specific occasion (70% of cases)
  • The individual buyer who will offer a gift card for an event to a loved one
• The gift card user : the person who received the gift card and will use it in a store (in-store or online).
• The sign : she can be the gift card issuer or part of a partner gift card program. She is the beneficiary who will receive the payment by gift card and will pay the commission fees to the issuer.
• The gift card issuer : a platform for managing gift vouchers, from issuance to cashing out with a wide range of services (main functionalities described below).

Payment process

1. Buying the card : A customer buys a gift card: on the merchant's site, in store, from a brand with a B2B offer or from a multi-brand platform.
2. Reception : The beneficiary receives the card (physical or digital).
3. Activation : If necessary, the card is activated in store or online.
4. Use : The beneficiary uses the gift card when making a purchase in store or online depending on the options available.
5. Validation : The payment system validates the available balance and approves the transaction if the amount is sufficient.
6. Additional payment : If the amount of the gift card is insufficient, an additional payment can be made with a bank card or any other alternative payment method offered on the website.

Gift card features

• The network : multi-brand card or single-brand card. You can opt for a card dedicated to your brand or join a multi-brand gift voucher network.
• The format :
  • Gift voucher
  • Physical gift card with magnetic stripe
  • Digital e-gift card (email, QR code, mobile wallet)
• Omnicanality : usable in stores and on the e-commerce site.
• Personalization : specific design, amounts chosen by the buyer, expiration date, etc.
• Payment Management : modification, cancellation, refund, bank reconciliation, etc.
• International : national, European or international programs.
• Payment flexibility : possibility of completing payment by card or other means, multiple uses, participation in a prize pool, etc.

Summary of advantages for retailers

• Customer Loyalty : offering rewards and sharing the love for the brand.
• Attracting new customers : powerful marketing tool.
• Additional acquisition channel : the appeal of B2B cards.
• Increase in sales : encourage additional purchases.
• Event marketing tool : ideal for special occasions.
• Cash flow : cash advance upon purchase of the card.

The main problems of integrating the gift card into your payment process

Despite their numerous advantages, gift cards pose several challenges when integrating them. Diversity of actors, functionalities, formats... In the number lies the major difficulty.

• Technical integration challenges : several providers = several APIs to manage.
• Accounting and management : payment tracking, bank reconciliation, etc.
• Interoperability : compatibility with POS and e-commerce platforms.
• security : fraud prevention.
• Payment page : keep a smooth and legible journey.

Purse makes it easy for you to integrate a gift card program