Understanding the Gift Card Life Cycle: From Issuance to Redemption

  • BluEnt
  • Gift Card Analytics
  • 21 Jan 2025
  • 7 minutes
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The gift card market is already setting trends and is expected to reach $510 billion in 2025. Due to the potential business opportunities, it holds, every other business enthusiast is talking about it.

Consumers are having a great time using this money-saving & innovative choice for purchasing. With the many benefits of these store vouchers, customers are lured towards owning more & more!

Let’s learn comprehensively about the life cycle of gift cards and how they work.

What are Gift Cards?

Gift certifications or cards are the valuable pre-paid tokens used by shoppers at the time of purchase. Simply put, the gift vouchers have some preset amount that can be redeemed as a payment method while checkout.

These prepaid tokens are issued by banks, business retailers, brands or credit card companies that authorise the user at the time of processing payment through various networks such as Mastercard or Visa

Maximise gift card performance and improve customer relationships.

Evolution of Gift Cards: From Papers to Digital Vouchers

The concept arises to reward both customers and retailers with a mutual benefit. Users get the flexibility to buy desired products, and the vendors get a satisfied client who comes back for more.

The popularity of gift cards is not new, these incredible monetary vouchers were in use even in the 1990s, giving consumers the redemption benefit.

However, the form was different – evolved from paper cards to plastic and now to digital, transcending with each era. Year by year, new features added to gift cards boosted the user’s convenience, card security, and personalization.

Interesting fact: Digital gift cards are gaining insane popularity with its users including 45% of Gen Z and 35% of Millennials.

As the technology evolved & is evolving, we hope to see more gift card industry trends in the future. Let’s learn more about the gift card life cycle including how gift card works, the management, and redemption.

Guide on Gift Cards Life Cycle and Analytics

A Guide on Gift Cards: Different Types Issued, Life Cycle, Usage and Other Considerations

Closed Loop Gift Cards

Stores or brands issue their own card to be used only at their stores & respective chains.

The provided tokens are designed to retain customers, giving them loyalty points to be redeemed at physical and online stores or using the brand app. Popular examples include Nike, Starbucks, Amazon and Walmart.

Open Loop Gift Cards

General purpose or open loop cards are tied in with other merchants who are in the same boat. The issuing authority, retailer and payment network work in sync with such types of cards.

Mastercard and American Express are popular examples. Users have the freedom to utilize it at multiple locations that accept it.

Physical and E-Gift Cards

Some stores issue dedicated plastic tangible gift cards, often decorated and adorned with branded formats. Whereas virtual cards are generated digitally by the stores to give clients their valuable services.

With changing gift card industry trends, digital cards stay ahead of the curve due to the ease & maximum usability convenience they offer to individuals.

Wondering what is the gift card purchase process? It’s as simple as applying for a credit card or even more! Let’s find out.

A Gift Card Life Cycle Explained

Once customers know the voucher configuration and the perks of acquiring a valuable code, they choose the suitable option.

Next, all the details are shared with the issuer to create the user’s account. The information may include your name, date of birth, payment information and email address.

On completing the payment, the client receives his gift card based on the choices he selected.

Some Key Considerations

  • We suggest careful monitoring before buying gift cards, avoid purchasing from unknown sites, and prefer a reliable source to ensure gift card fraud prevention.

  • It’s important to understand the usage by any demonstrations if required to eliminate future challenges.

  • Many vendors offer custom design features to enhance the card presentation. Don’t shy away from asking for a chic finishing…!

Manage the success with our smart gift card analytics solutions.

Explaining Activation of Gift Cards

Online Gift Card Activation

To activate gift vouchers online, find the URL given on either the front or backside, if there is a toll-free contact printed, make a call for an audio guide.

Put the coupon or promo code in the given field and avail the benefits of your prepaid card.

Additionally, from here, users can visit their account and inspect the information such as gift card expiration, available balance, and where it was used & more!

Note that some cards don’t need to be activated as they are already stated ready to use by retailers.

In-Store Card Activation Process

When activating a card (open or closed loop) in a store, it’s important to decide how much amount should be loaded.

It has a minimum and maximum value let’s say $10 and $500 respectively. The cashier will add the desired value and activate the account at the time you purchase it.

Such merchants also do gift card tracking to access important information and share it with you in times of need.

How Gift Cards Are Evolving Beyond Basic Transactions

Ever thought about why gift cards are in trend?

With time, these incredibly discounted coupons are gaining traction due to their immediate activation features, and the monetary & personal benefits they offer.

Do you know?

Approx. 39.9% of gift cards were sold during holiday seasons and the majority of the youngsters used e-cards for their maximum convenience, according to a report launched by Givex 2023.

This rise was due to its beauty in engaged and personalized services. A successful implementation of gift card marketing strategies is the result of advanced technology integration.

  • Users easily put their information and access the available discounted options based on their purchase history and shopping behaviour.

  • It is used as an ideal gifting choice for occasions such as birthdays, anniversaries and other celebrations.

With all this significant value, the activation of these vouchers is enduring at a great pace.

How to Store & Manage Gift Cards?

The story doesn’t end with purchasing & activation, that was just the beginning. You need to be vigilant about gift card management and its storage to make a gift card life cycle even smoother.

Track the available amount.

Keep an eye on the balance with the gift card tracking process. Check out the balance using your online account or by logging into the application.

Store the card in a vigorous holder.

Especially if you own more than one physical card, carefully keep them in a place to protect against scratches. This supports its lifecycle & aesthetics.

For e-card users, gift card fraud prevention can be employed simply by storing them in a robust e-wallet.

Regularly monitor the available offers to redeem on time.

You don’t want to waste the accumulated loyalty points. It’s best to rather give it to someone more likely to utilize if you’re unsure about claiming the amount.

Set card expiry reminders to refrain yourself from the unused balance.

Many gift cards are left unused with loads of money on it. Plan purchases and then retrieve that amount when certain items are qualified to be obtained from it.

Do you know?

According to Givex’s gift card analytics report, a total of 12.5% increase is determined by gift card values from the last year while the sales got a hike of 8%.

Gift Cards Redemption and Analytics

How Gift Cards Redemption Work

From shopping centres to entertainment zones, these cards have gained thousands of users over the years. However, still so many gift cards are left unused, the reason could be people being unaware of the redemption process, or just forgetting if they own it.

Here are simple ways on how it really works.

  • Online redemption is done by providing the code or a number while checkout to let a specific amount get subtracted from the original cost or pay the money entirely from it.
  • In-store redemption is done by the salesperson in the store either by entering the code, scanning the bar code or simply by swiping.

Important

Check the expiry dates and unused balance before the card’s life expires. Also, carefully read the terms and conditions and ask about inactivity fees.

What Happens Once Gift Cards Are Used?

The amount is deducted and the card holds the remaining amount after the redemption. Some cards may or may not be reloaded again, it’s important to read the terms & conditions. Many issue networks allow users to resell cards for cash and other applicable gift options. Research online marketplaces and compare the resale value of your gift card from multiple resources until you get the best deal.

Some Key Performance Indicators That Improve Gift Card Marketing Strategies

Businesses follow many strategies and gift card analytics to track their performance and the impact on customers. Using consumer behaviour tracking and personalizing the rewards accordingly, corporations streamline their procedures.

  • To identify growth, businesses monitor yearly sales and analyse new users.

  • Inspects demographics used for redemption to personalise the services in future.

  • Studies the customer behavior how & when they mostly use the vouchers.

Depending on these metrics, brands run gift card campaigns to attract consumers who are more likely to utilize their rewards.

Optimize gift card marketing strategies with the best in the industry.

To Increase Revenue and Client Base, Retailers:

  • Run promotional offers and limited time deals that create a sense of urgency to persuade traffic for redemption.
  • Issue many loyalty rewards to users as a part of gift card programs to boost sales volume and generate decent outcomes.
  • Partner with multiple brands to elevate customers and network.

The Conclusion

Putting all together, gift cards are another payment mode to be accepted by certain brands and the users get tons of benefits by redemption. As a business owner, running gift card campaigns unlocks potential monetary benefits.

With different types come different terms & conditions that we suggest are crucial to learning while availing yourself of these vouchers. Most importantly, take services from a trusted business to prevent gift card fraud.

From issuance to redemption, BluEnt assists you with gift card tracking and takes care of the entire life cycle. We are trusted by brands for delivering streamlined gift card management programs to supercharge their operations.

Enter the realm of excess growth with the latest market trends, get in touch with our team now.

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CAD Evangelist. "Understanding the Gift Card Life Cycle: From Issuance to Redemption" CAD Evangelist, Jan. 21, 2025, https://www.bluent.com/blog/gift-card-life-cycle.

CAD Evangelist. (2025, January 21). Understanding the Gift Card Life Cycle: From Issuance to Redemption. Retrieved from https://www.bluent.com/blog/gift-card-life-cycle

CAD Evangelist. "Understanding the Gift Card Life Cycle: From Issuance to Redemption" CAD Evangelist https://www.bluent.com/blog/gift-card-life-cycle (accessed January 21, 2025 ).

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