How flexible, modern gift cards fit into customer-centric strategies

The recession precipitated by the global spread of the coronavirus hit retailers hard. Excluding food service, sales fell 17% percent between January and March 2020, according to the Federal Reserve Bank of St. Louis. Leading brands like Pier 1 Imports, JCPenney, and Tuesday Morning have filed for bankruptcy. Thousands of stores are closing.

The retailers that remain want to be there for their customers when the United States and countries around the world emerge from the crisis. Many are adopting broad customer-centric strategies to align their products with the wants and needs of their most valuable patrons and create memorable, friction-free experiences.

Flexible, modern gift cards support these strategies in three important ways.

Freedom of choice

Payment cards issued through a modern card issuing platform like Marqeta share some of the best characteristics of open-loop and closed-loop payment cards. Like open-loop gift cards, they can be spent as readily as cash. Like closed-loop gift cards, they can be customized to drive traffic to a particular merchant, group of merchants, retail location, geographic area, and more.

Physical and digital 

Consumers are embracing contactless payments and increasingly whipping out their phones in place of their wallets. To remain relevant, gift cards may need to migrate to digital wallets. Modern gift cards are particularly suited to shape shifting. Physical gift cards can be sent in the mail and tokenized to a digital wallet, while virtual gift cards can likewise be issued and tokenized for customers who value a greener experience.

Real-time insights

Modern cards provide valuable data on customer behavior and product preferences. Beyond traditional spending data, a gift card program run on a modern card issuing platform offers the ability to set webhooks that provide real-time notifications of card behavior. For example, program administrators can learn when a physical card is tokenized to a digital wallet and get notified as soon as an authorization is requested. They can also easily gather information about geographic and time-of-day usage and apply that information to better connect customized cards with the right customer personas.


For consumers, the new generation of gift cards offers the opportunity for more meaningful gifts and more affordable shopping.

Gift cards, which have long been the go-to for an easy and practical present, are getting an upgrade.

The online world is full of beautiful, one-of-a-kind items handmade by skilled artisans. But one person’s treasure is often another person’s bric-a-brac. Instead of trying and failing to select the perfect present or simply giving an impersonal gift card issued by a large retailer, a gift giver who chooses a modern card can introduce a friend or family member to a jewelry maker, a candle maker, or another favored artisan, or even curate a selection of artisans. In exchange for being included on a modern gift card, a store owner could offer a discount to the cardholder, creating a personalized shopping experience in which everybody wins. 

Gift cards are a proven promotional strategy. A study by First Data found that over a third of gift card recipients changed their purchasing plans, with 25% purchasing an item that they had not planned to buy. Seventy-two percent said they spent more than the original value of the gift card. Meanwhile, 11% said they had never or rarely visited the merchant’s location.

Local chambers of commerce have long urged businesses to offer gift cards or certificates. In March 2020, the U.S. Chamber of Commerce offered a tutorial on how to offer gift cards as a way of generating revenue during the coronavirus outbreak. While such efforts have had only modest success to date, that could change soon. It’s easy to imagine loading up a digital wallet with modern gift cards purchased from local business associations that can be used to pay for discounted groceries, meals, concerts, and sporting events. In the travel industry, airlines and travel advisors could curate personalized experiences with built-in discounts for vacationers, and business travel providers could put together packages that comply with a range of policies while ensuring the most value for a dollar.

Dark days of plummeting sales, shuttered stores, and layoffs can make it hard to trust that better times are around the corner. And yet, if retailers use the pause to deepen their understanding of their customers and invest in the shopping experience, signs point to the possibility of a retail resurgence. There is hope that retailers will one day regain, and even exceed, the sales peak reached in the recent past.