Retailers Are Getting Better at Managing Gift Card Programs, a Report Finds

Grocers and home-improvement retailers may have something to take pride in. These two merchant categories are among the most improved in terms of managing their gift card programs. That’s the insight from the fifth 2022 Merchant Gift Card Omnicommerce Evaluation–U.S. Edition released by Blackhawk Network Holdings Inc.

The rankings of 100 U.S. retailers, conducted by Philadelphia-based Napco Research, evaluated their gift card programs on 176 criteria and assigned a score to each. Merchants with an app could earn up to 340 points; those without, up to 293 points. Some of the data points for the in-store assessment included whether transactions could be completed for mobile in-store gift card transactions, the variety of cards offered at an in-store checkout, and whether custom amounts were available for store cards. Select evaluation elements for the digital component included the availability of physical and digital cards, delivery time, reload capabilities, and self-service customer-service options.

At the top of the pile is Amazon.com Inc., at 107%, followed by Target Corp., 101%, Subway, 88%, Kroger Co., 85%, and lululemon at 83%. These scores are a composite of separate ratings for in-store, mobile, and e-commerce/digital. Amazon, for example, had a 76% rating for its in-store gift card program, but scored 155% in mobile and 90% in e-commerce/digital.

Perhaps mirroring the behavior of consumers, many retailers have put more focus on their digital programs, while in-store programs showed the slowest rate of improvement. Home-improvement retailers, on average, increased their score to 68%, up from 48% in 2020, a 19% improvement. Grocery ranked at 69% this year, up from 51% in 2020.

Though no retailer segments decreased, some had more modest gains. The health-and-beauty segment experienced a 3% increase in its store gift card realm, to 58%. Restaurants had only a 1% improvement, to 57%.

“With encouraging improvements in Web and mobile experiences, we’re seeing that the investments retailers have made in recent years to optimize their programs are paying off,” Jay Jaffin, Blackhawk Network chief marketing officer, said in a statement. “However, the research also revealed that there is still a lot of opportunity for improvement in each channel. The good news is that there are actionable steps merchants can take that will continue to help elevate their programs.”

Mobile apps are a potentially significant area for improvement. “Year-over-year scores did improve in the channel, however, the overall average score of 42% shows there is still a lot of work to be done—particularly as shoppers that download a retailer’s app tend to be their most valuable customers,” Pleasanton, Calif.-based Blackhawk says says in a statement.