4 ways retailers can improve the gift card experience

By Ross A Hall on November 8th, 2016
4 ways retailers can improve the gift card experience

Gift cards have been around in one for or another for centuries. The idea is pretty simple: I give a store money, which they give to you in the form of credit. I win because I’ve given you a gift and get that warm glow inside, you win because you get the boost of receiving a gift you can use to buy what you want, and the store wins as it helps cash flow. It doesn’t matter than cash is far more flexible and useful, there’s a certain psychological warmth that comes with the idea thought went into it.

It was only natural the gift card became digital as ecommerce grew, and as we’ve merged our online and offline channels they’ve evolved from being things you only use on a website to being something you can use anywhere. Sometimes even with different retailers.

At least that’s the theory.

The application of digital gift cards remains fragmented and poor as an experience. Retailers continue to make customers jump through hoops to redeem and use gift cards.

Three key areas seem to stand out as being in need of urgent experience design: the redemption of physical cards, signposting amounts and choosing how and where to use them.

Offline to Digital

There is still a certain kudos to giving a physical gift. A small plastic card with a stylish design and the word “Gift” on it somehow seems more real than getting an email with a link in it. Getting that gift into the online world can be problematic.

The usual approach is to have the recipient log into their online account (or create one), then type out the number and let it rest on the account as a credit. Sometimes the number has to be typed in after each transaction. While some will print that number as a single string, others will at least break it up into 4, 5 or 6 digit groups that are easier to type.

Allowing the recipient to upload a photograph of the card is an approach being adopted by some retailers. Although this isn’t as simple as it sounds from an experience perspective, it is likely to become a dominant method over the next few years.

Applied to account

In most instances the gift is applied to the account as a credit. This is usually shown as a cash amount somewhere in the ecosystem, usually at the checkout where the user is told how much credit has been applied to their purchase.

Allowing the user to view their credit balance during the purchase flow is a must, the only question is where and how. Two dominant schools of thought could be applied:

Show it all times to the user is informed and can make decisions about what they wish to purchase. The upside is this will trigger some buying behaviours, the downside being it may limit behaviour to being in proximity to the credit amount.

Reserve it until they are in the checkout flow. The upside is users will not be influenced by the credit amount and therefore buy more based on what they think they can spend. The downside is customers may be frustrated by having to drop items they selected but otherwise would not have wanted if they’d known their credit.

Choose to use

Typically the gift is applied to purchases at the checkout without the user being asked if they wish to use it. Whilst this offers a degree of convenience, it can result in difficulties. For example, purchasing a gift for someone else using your own gift card can feel a little uncomfortable or awkward. It might also cause problems if the purchase is work related and has to be bought through a company credit card or reclaimed via an expenses system that is unfriendly towards gifts.

Offering the user the ability to fund the purchase entirely from a different card should be accessible. Clearly the default position should be to apply the credit, but enabling the user to self-fund will help.

Online to offline

It’s surprising how many retailers claim they offer a true “omnichannel experience” yet their customers can’t use online gift cards in their physical stores. While this gap is closing it needs to be closed faster.

Embedding the gift into an app that can be used at the physical checkout is a logical step. If that app provides access to the customer’s account so that gamification and loyalty can be applied so much the better.

Gift cards continue to offer benefits to people that are more psychological than practical. As our off and online worlds merge how retailers manage and handle the giving and using of gifts has to become more integrated and seamless. This means revisiting the gifting experience in terms of how they’re redeemed, applied to accounts and ultimately how and where they are used.

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My name is Ross Hall.
I design effective, profitable experiences.
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