Digital Gift Cards Have Outgrown the Holiday Calendar

Digital gift card relevance is no longer confined to the holiday season. As consumers use them for more occasions throughout the year, the next opportunity for retailers is making mobile purchasing, digital delivery, personalization and digital wallet integration work together as one connected experience.

To assess how well retailers are connecting these capabilities, the ninth annual Best Direct Digital Gift Cards Benchmark Report, developed by Blackhawk Network (BHN) in collaboration with NAPCO Research, evaluated 120 brands’ direct digital gift card programs — i.e., brands’ own gift cards sold through their websites or apps — across 19 industry verticals in the U.S. and Canada. The study assessed purchaser and recipient experiences against 147 criteria across desktop, mobile web and mobile apps.

The findings suggest that many retailers already have the core capabilities for gift card programs in place, yet opportunities remain to better connect marketing, purchasing, delivery and redemption to the way customers now discover, buy and use digital gift cards.

Year-Round Visibility Matters

In the benchmark report's marketing assessment, which examined gift card promotions across websites, apps, email, social media, search and sales offers, brands earned an average of 34 percent of the available points — one of the weakest categories overall.

That reflects a familiar pattern. Gift cards receive significant attention during the holiday season, which makes sense given the importance of year-end gifting. However, customer demand extends well beyond November and December.

Americans buy an average of nine gift cards annually for occasions including birthdays, thank-yous, and Valentine's Day. Nearly 40 percent of consumers also said a promotion or bonus card would make them more likely to buy.

As gift card purchasing becomes more evenly distributed throughout the year, visibility can evolve alongside it. Retailers may choose to feature gift cards within seasonal campaigns, loyalty communications or app experiences, or make them easier to find through site navigation.

The right approach will differ by retailer, but the common objective is making gift cards easier to discover during the occasions that matter most to consumers.

Mobile Performance Shapes the Purchase Experience

Making gift cards easier to discover creates more opportunities to purchase, but only if the buying experience is equally straightforward.

The benchmark report found a wide gap in mobile performance. The three highest-performing industry categories averaged 85 percent across the report’s mobile experience criteria, while the three lowest averaged 41 percent. That variation suggests customers can have very different experiences completing what's essentially the same purchase.

Buying a digital gift card often involves several decisions: selecting a value, choosing a design, adding a personal message, selecting a delivery method, and completing payment. On a mobile device, those steps should feel intuitive and connected rather than requiring customers to navigate a process designed primarily for desktop.

For many shoppers, the mobile experience is the brand experience. As retailers continue investing in digital commerce, applying the same attention to gift card purchasing helps create a more consistent customer journey.

One useful way to evaluate the program is to begin before checkout. Understanding how easily consumers find gift cards, move through personalization and delivery options, and complete payment often reveals opportunities to simplify the experience.

Delivery Options Continue to Evolve

The benchmark found that two-thirds of brands offered delivery by text message, reflecting continued progress in giving customers more flexibility in how they send digital gifts. Scheduled delivery was available from nearly half (48 percent) of brands.

Each capability serves a different customer need. Text delivery makes it easy to send a gift through the communication channel recipients already use. Scheduled delivery gives buyers confidence that a gift will arrive when the occasion calls for it, whether that's a birthday, an anniversary or another meaningful date.

Together, these capabilities illustrate how customers experience a gift card program as a single journey rather than a collection of individual features. Delivery options become more valuable when they support both convenience and thoughtful timing.

The same principle applies to personalization, denomination choices and multi-recipient functionality. The most meaningful enhancements are often the ones that support the occasions and customer behaviors most relevant to each retailer.

The Experience Continues After Delivery

For the purchaser, delivery may feel like the end of the transaction. For the recipient, it's the beginning of the experience.

A smooth purchase experience loses value if recipients have difficulty understanding where a gift card can be used, how to check a balance, or how redemption works across channels. Digital wallet access and flexible redemption can make that experience even more convenient by making value easier to store and manage.

These interactions deserve the same attention as the purchase process itself. A digital gift card may introduce someone to a brand for the first time or create another reason for an existing customer to return. In either case, the experience should feel intuitive from the moment the gift arrives.

Looking at the experiences of purchasers and recipients together provides a more complete view of the program and often reveals opportunities that may not appear during a checkout-focused review, such as inconsistent redemption instructions, channel differences, or unnecessary friction post-delivery.

Connecting the Customer Journey

Gift card programs naturally span multiple parts of a retail organization, including marketing, e-commerce, payments, loyalty and customer service. That cross-functional reach is one of their strengths, but it also makes it important to periodically evaluate how the entire experience comes together from the customer's perspective.

The benchmark report provides a solid framework for doing that. Retailers can compare gift card visibility with the occasions driving customer demand, evaluate the purchase experience from discovery through confirmation, review whether delivery options match buyer expectations, and then repeat the process from the recipient's perspective. Viewed together, those touchpoints provide a clearer picture of how buyers experience the program.

Digital gift cards have become part of year-round shopping and gifting behavior, and many retailers have already built a strong foundation to support that shift. As digital capabilities continue to mature, one of the greatest opportunities is ensuring those individual touchpoints work together to create a seamless experience for both buyers and recipients.

Brett Narlinger is chief revenue officer at Blackhawk Network (BHN), a global branded payments provider.