7 recommendations to launch an international gift card program

by | 2 Feb, 2021 | INSIGHTS

Many brands now operate internationally, either through their website or with physical stores. But few of these companies have an international gift card program. Yet, gift cards could be the perfect marketing tool to strengthen their international presence, win over new customers in these countries and stand out from the competition.

Be careful however, implementing an international gift card program requires to take some precautions, and lay some groundwork beforehand.

1.    Make sure your gift cards meet the needs of foreign consumers

Before developing gift cards overseas, it is essential to undertake market research or field research. Gift cards are not necessarily accepted by all consumers around the world. For this new service to be successful, there must be a demand. Then, you will have to make sure the restrictions and regulations are not too complex to set the service up.

Secondly, it is important to know where they stand with digital technology and what are their consumer habits. Is e-commerce well developed? If so, it could be interesting to sell your plastic gift cards online, or even offer digital gift cards. Do m-commerce and mobile apps matter a lot? If it is the case, your brand will have to adapt its digital gift card to mobile devices and pay special attention to mobile wallets.

2.    Check each country’s regulatory constraints

Let’s not forget that gifts cards are a means of payment. The regulations framing them differ in each country. In France, there are market regulations which are quite different from those in Germany or in the United-States. Therefore, brands must inquire about the terms and conditions governing the issuing and use in each country they wish to establish in. The latter can be used to define the future basis of the brand’s general terms of use. For example, the law demands that gift card have a minimum period of validity, but nothing prevents the brand from extending that period.

With that said, in concrete terms, what are the points to look at?

  • Protection against theft and loss: if a consumer happens to lose his/her gift card before the end of the validity period, what are the terms and conditions in order for them to receive a new one with the same amount?
  • Minimum period of validity (outside of marketing campaigns etc…): in Germany, the minimum period of validity is 3 years, 5 years in the US and one year in France.
  • Refunds: if a consumer is not pleased with the service, are there mandatory repayment terms?
  • Specific characteristics of the market regarding works council and professionals: a brand can very well open its gift card offer to works council in incentive programs. Regulations differ in the B2B context. For example, in France the State exempts companies that buy for around €171 worth of gift cards per employee for special occasion (Christmas, retirements, …).
  • Redeemable for cash: a card holder might want cash rather than a gift card. It is important to know if you have to comply with his/her request. In the State of California, the brand must consent to the exchange under certain conditions.
  • Management fees: for the activation or non-use of the gift card, the brand might want to charge a fee. However, it will be necessary to check if you are allowed to do so.

3.    Identify a fluid journey to match consumer habits

Consumers in other countries might have multiple expectations and different habits well rooted in their daily lives. For each country the customer journey may have to be adapted. The goal is to always have a fluid and seamless journey.

Moreover, to buy a gift card online, a user will have to proceed with the payment. It is an important step that needs to be optimized to best limit the cart abandonment rate. For each area, it is necessary to analyze which means of payment prevails. In France it is credit cards and PayPal, however, in Germany, many prefer bank transfers.

4.    Manage international logistics for plastic gift cards

If the brand offers plastic gift cards on its online or physical stores, establishing in the country will be more complex. It will have to create strategic partnerships with one or several printers in the chosen areas and develop a logistic network, if it has not already done so.

5.    Handling different cases and devices

For gift cards, it is important to work with a payment service provider already operating on international markets. They have to be able to help you identify the specificities of each market and the multiple currencies. For each country, you will have to sign a distance selling contract that is specific to gift cards and choose the different means of payment. It is easier to work on separate cases. France would correspond to one case, Germany to another. Of course, each brand adapts its solution to its own constraints.

Finally, just like for any online payment, the brand has to set up a fraud protection system that is flexible and that can be adapted to international use. It is important to develop an efficient protection against fraudsters to minimize losses.

6.    Creating a B2B network in each country

Brands can extend their gift card program with B2B. They can offer gift cards to distributors and resellers who will then sell them to private individuals or professionals. For example, a brand might have developed a strategic partnership with a company that delivers a solution offering rewards programs to work councils. However, this partner might not operate internationally. In this case, the brand has a lot of work ahead: it will have to find distributors in each country and build new strategic relationships.

7.    Focus on marketing and communication

Once gift cards are sold in stores or online, the work is far from done. Now, you need to develop a marketing and communication strategy. Brands first need to work on the service’s reputation, with current customers but also with a wider target audience. For example, to encourage testing the product, brands can decide to offer gift cards to new customers or make a limited promotional offer on gift cards.

Then, brands will have to draw up a plan to animate their gift card program. It is important to make your program attractive in order to reap all its benefits. For example, adding gift cards to the loyalty program or the after-sales service. Of course, each brand should adapt its marketing plan according to its personal business objectives.

Suggestions for further reading

How to boost your gift card distribution network ?

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