The Trouble with Gift Cards
Gift cards can be incremental revenue and a low-friction way to bring new guests into the brand. The unlock is execution.
A nationwide multi-unit brand came to us with a simple goal: “We need gift cards live before the next holiday rush.”
That sentence sounds straightforward. It rarely is.
Because the second you say “gift cards,” every department hears a different project:
- Marketing hears “promotion.”
- Technology hears “integration.”
- Finance hears “liability” and “reporting.”
- Operations hears “guest issues.”
The upside is real: gift cards can be incremental revenue and a low-friction way to bring new guests into the brand. The unlock is execution. You need clear ownership of your gift card program and a strategy for how it fits into your digital business model.
This post is about what to consider with your gift card program.
Why Gift Cards Matter (Beyond the Holiday Spike)
Brand leaders know that gift cards bring in revenue.
Done well, gift cards can:
- Drive incremental revenue without discounting.
- Create a customer entry point (a gift card is often someone’s first experience with your brand).
- Support seasonal surges and special occasions without straining operations.
- Meet a basic guest expectation for major brands.
- Generate the financial upside of breakage (or unused balances) depending on accounting treatment.
The bottom line is simple: gift cards are a proven revenue lever and should not be a “nice to have.”
Gift Cards Are A System
A gift card sounds like a single thing. In practice, it’s a system that must work reliably across the places your guests interact with you.
At a minimum, your program has to…
- Allow guests to acquire value (buy a card or add value to an existing card)
and…
- Allow guests to redeem value (use a card)
And that needs to be available across all of your channels – in store, web ordering, app ordering, and in your loyalty program. Those requirements allow you to meet your guests where they are.
They might:
- Buy an e-gift card online and use it in-store at the register.
- Buy a physical card in a restaurant and use it in your mobile app later.
- Purchase a card for someone else and expect it to work at any location.
- Pick one up off a retail rack at a grocery store and redeem it on your web ordering.
Each of those experiences can be smooth – but only if your underlying “gift card brain” is built for it.
A strong gift card program starts with three decisions: what it’s for, where it works, and who owns it. Because once a guest has a gift card in hand, they’re not thinking about channels or systems – they’re thinking, “Can I use this here?”
The Gift Card Stack: What You Have To Consider
Get Clear on These Four Decisions
- Product Format: Start by deciding what you’re actually putting in guests’ hands. Physical cards are still great for in-store and traditional gifting, while digital cards (email delivery, app storage, mobile wallet) can be faster to distribute and easier to scale.
- Sales Channels: Next, define where gift cards will be purchased – because each channel adds requirements.
- In-store counter sales are appropriate for physical gift cards
- Direct-to-consumer sales through your website can be for either physical gift cards or e-cards. If you are selling physical gift cards online, then you need an eCommerce shipping solution.
- Retail distribution adds partners and complexity. Corporate/bulk (B2B2C) gift card programs can bring meaningful volume if you’re set up to support it.
- Redemption Channels: Then get explicit about where guests can redeem, because this is where guest expectations are highest. In-store POS, web ordering, and mobile app ordering all need to be reliable channels where guests can redeem gift cards. You also need to consider how gift card purchasing and redemption provides rewards or value to your loyalty guests.
- The Gift Card Processor: Your gift card processor is responsible for issuing cards, tracking balances, authorizing redemptions, and producing reporting that finance can use for reconciliation. You must ensure that this processor and the transfer of the transaction data works seamlessly with your other payment channels through POS and mobile ordering.
Introduce a New Gift Card Program
If you’re launching gift cards for the first time, it’s critical to build a program that fits your business model and works cleanly across all of your digital channels.
- Make all of the decisions in the gift card stack above first.
- Make an ecosystem diagram of all of the systems your gift card program will impact.
- Ensure integration with complex, core systems already exists & identify where an integration may need to be built for other systems
- Conduct a full and comprehensive request for proposal (RFP) to find the right partner that fits the business model you have already defined.
Change your Gift Card Processor
If you’re considering switching providers, the key is to recognize what’s really at stake – you need zero disruption to your guest experience.
- Liability reporting & migration: The new provider must have accurate balances so when a guest tries to redeem a gift card it works.
- The cutover must have clear timing and sequencing and a plan for store support and exception handling.
Ownership: The Hidden Lever
Gift cards sit between payments, guest experience, store operations, and marketing. The brands that get the cleanest results make one move early. They assign a clear owner with cross-functional authority. That owner aligns the teams, drives decisions, and creates a shared definition of success.
Executive Checklist: What “Good” Looks Like
If you want a gift card gut-check, use these questions to guide you:
- Single-Sentence Definition: Can you describe the purpose of the program in one sentence?
- Sales Channels: Where do you want your guests to buy gift cards?
- Redemption Channels: Where do you want your guests to redeem gift cards?
- Ecosystem Reality:
- Do you have one or multiple systems for POS, payments, mobile ordering?
- If you are a franchise organization, how do their tech systems differ?
- Loyalty Implications: How do you want gift cards to touch loyalty both in-store and digitally?
- Migration Plan (If Applicable): How will you validate outstanding balances and protect redemption during cutover?
If any answers are fuzzy, that’s your sign to align on requirements and ownership before you select a vendor or begin a conversion to a new vendor.
Gift cards can be a meaningful revenue lever, but only if they’re built with the same discipline you bring to payments, digital ordering, and store execution. You need to get clarity first, then build.
Ready to move? Let’s talk.
