How to choose the right gift card solution? – Comprehensive guide –
It's official—after observing the ever-growing demand and numerous benefits for both consumers and brands, companies are now embracing gift cards as a key part of their development strategy. But now comes the big question: should the solution be developed in-house from scratch, or should it be outsourced? And if outsourcing, which external partner should you choose?
The decision between internal development or partnering with a third-party provider is critical to the success of a gift card program. Here are a few key considerations to help you determine the best possible solution.
In-house development: complete design freedom, but the risk of losing focus
The clear advantage of developing your gift card solution in-house is the ability to have full control over the entire project. You can define the budget precisely and gradually allocate financial resources. You control the timeline, human resources, and all the necessary parameters. One of the most important aspects of creating a custom solution is that it will perfectly align with the company's vision and values. You can foster internal collaboration with dedicated teams to ensure a thorough understanding of the initial idea. However, costs and time must be carefully managed to successfully complete the project. The freedom to design may also pose a risk.
When we think about gift cards, what’s the first thing that comes to mind? The user or customer interface. While this is certainly important, it’s only a small part of the overall solution—and one that most brands and retailers already have mastered. It’s essential to remember that a gift card is much more than just a product; it’s also a new payment method that brings its own complexities. You’ll need to integrate it with your e-commerce system and physical stores, secure it, manage after-sales support (like lost cards or refunds), handle accounting, and ensure regulatory compliance. All of this involves multiple departments within the company.
Each team will have its say, its own vision for the project, and its own responsibilities. This can lead to conflicts, driving up costs and extending timelines. Another critical factor is the product itself. Diverging opinions can harm the solution's viability: an inadequate customer journey or suboptimal UX if the IT team takes the lead, or an overload of features if the marketing team dominates.
Custom development by external providers: dedicated resources, but beware of hidden costs
Brands and retailers can’t be experts in every field. The primary advantage of outsourcing your solution is to work with professionals who are already skilled, allowing you to focus on your core business. This leaves more time to think about your goals and overall strategy, and to anticipate how this new gift card program will integrate into your customer acquisition and loyalty plans.
What are the options?
Gift card plugins
There are numerous gift card extensions available for each CMS. Prestashop, Magento, and Woocommerce gift card plugins all operate on a similar basis. They allow e-commerce businesses to create a new product corresponding to a gift card. The customer can then place an order as they would for any other product, and the recipient will receive a code.
The two main advantages of plugins are their quick setup and low cost.
However, they only represent a part of a more comprehensive solution. The customer experience may be limited, with non-optimized journeys and restricted features.
Additionally, constant adaptation to customer expectations and new regulations surrounding gift cards makes plugin solutions less competitive in the long term. Another point to consider: using plugins carries potential risks, including additional management costs, bugs, security vulnerabilities, and the possibility that updates will stop.
Finally, most plugins treat gift cards as products, while they should be handled as a payment method when it comes to financial flows. Significant accounting adjustments will need to be considered.
It is therefore crucial to carefully assess the pros and cons before opting for a plugin solution.
IT service companies and marketing agencies
IT service companies (SSII) and marketing agencies offer more comprehensive solutions for managing gift cards, integrating them into a long-term development strategy. They provide personalized services, including a custom client interface and a complete back office for managing gift cards.
However, this level of customization leads to higher costs and longer timelines compared to CMS extensions. Marketing agencies excel in customer experience and acquisition strategies but may need to subcontract technical aspects like security.
IT service companies, while versatile, should be chosen based on their area of expertise and previous experience in the gift card sector.
Choosing a SaaS gift card solution
Like custom external development, a SaaS solution allows brands to stay focused on their core business while relying on industry experts.
Using a SaaS platform enables a brand to quickly access a viable gift card solution and remain competitive against companies that already offer such services. Deployment typically takes just a few weeks, a significant advantage compared to custom development, which can take anywhere from several months to a year.
This approach provides expert support throughout the project. SaaS ensures increased security for financial transactions thanks to integrated anti-fraud protocols, and it offers flexibility tailored to each brand's environment.
While less customizable than a bespoke solution, SaaS platforms provide optimized customer journeys and interfaces, which can evolve based on feedback and testing. Several pricing models are available, offering options to suit different budgets.
Choosing a SaaS provider should be done carefully, considering their current clients and the technology they use to ensure a reliable partnership.
Key considerations when choosing a gift card solution
Customer interface and customization level: Is the customer interface adaptable to the brand? Is the customer journey optimized or can it be tested? What features are available to personalize the gift card?
Features for the brand: Can visuals be changed directly? Is it possible to send gift cards as part of acquisition and loyalty strategies? Can promotions be applied to gift cards?
Omnichannel capability: Can the gift card be used in both physical and virtual stores? Can it be sent via email as a digital card and simultaneously as a physical card?
Compatibility and integration: Can the solution be implemented with the brand’s current information system? Can it be integrated into existing infrastructure?
Security: Does the solution offer an anti-fraud protocol? What security measures are in place? Is it machine-learning-based or static?
Scalability and R&D: Can the solution evolve over the coming years? How much is invested in R&D? Are future developments included in the price?
Expertise: What is the core business of the provider? What human resources are available? What technologies are being used?
Support and after-sales service: Does the provider ensure service maintenance? How are cancellations and refunds handled? Is there genuine support provided?
Cost: What is the budget? Is it a flat rate? Is it performance-based or not?
Choosing the right gift card solution in 2024
A solution with a focus on distribution
In any gift card solution, distribution is a key factor for a successful program. The various lockdowns and the shift to remote work have challenged team management and cohesion. A popular method used by companies to motivate and reward their employees has been to multiply digital reward programs.
As a result, distributors and incentive agencies are actively seeking rewards to refresh their catalogs.
Having a feature that connects and creates distribution flows for digital gift cards will accelerate your presence across multiple catalogs, reaching employees of all types of companies—and opening the door to new potential customers.
Loyalty feature
In recent years, consumers have demonstrated their desire to belong to a group or brand through loyalty programs. While the abundance of similar programs can make consumers fickle, they still expect a unique and privileged relationship.
Using gift cards as a tool for customer loyalty or compensation can be highly engaging. A solution that allows for the free distribution of gift cards to email or postal address lists is essential for creating a competitive program.
This feature can be used in various campaigns, such as reactivation campaigns after the recent lockdown, for example.
A structure compatible with branded currency
Future gift card programs will need to embrace the concept of branded currency to remain effective. This means treating the gift card as part of the brand’s currency, and using it alongside other brand currencies (loyalty points, discount vouchers, etc.). The goal is to activate the right currency at the right time for the right person, driving specific actions and long-term engagement.
To enable this synergy, it is essential to implement a gift card solution that is agile and flexible, capable of connecting with other third-party services in a simple and efficient manner.
