What ISVs Need to Look for in a Gift Card Program

• Per CapitalOne Shopping Research, roughly 43% of adults in America have a gift card with unspent balances amounting to about $23 billion, boosting cash flow for merchants without requiring them to move inventory or provide services.
• Again, according to CapitalOne, shoppers using gift cards spend 61% more than the card value, an average of $31.75 more. So, when merchants sell a gift card, they can expect a future store visit from the customer or the gift recipient, and they expect more revenue on that second visit.
• According to The Strawhecker Group, 81% of U.S. consumers bought gift cards in 2024, and a majority of customers, 57%, say getting a gift card inspires them to try a new business.

To stay competitive, POS ISVs need to provide systems that support gift cards, equipping their merchants with what they need to succeed and thrive in the marketplace.

What Are Priority Gift Card Program Features?

The facts are clear that you need to offer a POS system that supports gift card programs. But the question is how to choose a solution with the flexibility and features that deliver real value. When you’re considering programs, look for these five must-have features:

• Omnichannel Merchants that sell on multiple channels will capture more gift card business if they can sell and accept cards wherever customers engage, whether in person or digitally. Consumers also want a choice of physical or digital versions of gift cards that they can email to a recipient or load onto a digital wallet. A key to smooth omnichannel gift card experiences is a program that updates in real time across all of channels and locations. This allows consumers to use cards immediately, in the store or online.

• Balance Checking and Reporting Merchants want to be able to see gift card transactions and outstanding balances in real time. Look for a gift card program that allows you and your merchants to easily access data on a customizable API-driven dashboard with 24/7 access. Leading solution should also give merchants the flexibility to configure reports to show the data that’s most important to them and to give customers the ability to check their gift card balances.

• Alternative Payments Offering options for payments with gift cards can add appeal to gift card programs. For example, digital gift cards with QR codes enable customers to pay by having a merchant scan their smartphones, so they don’t have to carry cash or cards. Text to pay is another option. Consumers can click a link from the merchant and enter their gift card numbers to pay. Also, fitness centers or other businesses that sell memberships can allow customers to pay with gift cards, which may help ISVs break into new markets.

• Fraud Protection The gift card program you provide to your customers must include fraud prevention features. Tools such as fraud detection analysis, maximum spending limits, and PIN requirements can prevent losses from gift card fraud. Additionally, the gift card program dashboard should be protected with access control measures, like multi-factor authentication.

• Promotions Gift cards are an effective incentive and loyalty program reward. Support this use of gift cards by offering a program that allows merchants to preload cards with promotions and expiration dates.

Which Gift Card Program Features Benefit ISVs?

It makes sense to choose a gift card program with all the features your merchants will find valuable. But savvy ISVs also look for gift card programs that make their lives easier and help them elevate their brands, such as:

• White labeling: A gift card solution that you can provide under your brand or the merchant’s brand will provide the best return on investment. For additional benefit, you can use a branded virtual terminal for loading, selling, and checking gift card balances.
• Flexibility: Not every gift card program is right for every business. ISVs who want flexible options can partner with a payment company that allows them to choose from various third-party gift card programs.
• Solutions: It’s smart to work with a partner that has a solution for every hurdle you or your merchants will face, like handling returns or chargebacks when the customer paid with a gift card and protections for stored value.

How Can ISVs Make the Cut with Gift Card Program Offerings?

Because of the popularity of gift cards, merchants evaluating POS systems will inevitably ask whether your POS system supports gift cards. To close that deal, or even to be considered, your answer needs to be yes. Then you also need to be ready to explain that you can deliver the features that will help them build customer satisfaction and grow gift card revenues. One of the best ways to give merchants gift card program functionality is by partnering with a payments solution provider with a comprehensive gift card program. Contact Datacap for information on our industry-leading program fully integrated with our payments solution. It’s an omnichannel program that allows you to white-label solutions, easily scale, and adapt to your market’s needs.