New Report Identifies the US Merchants With the Best Gift Card Programs

For the seventh consecutive year, NAPCO Research and Blackhawk Network have partnered to produce an industry-leading report on U.S. merchants’ gift card programs. The 2024 assessment included a review of retailers’ e-commerce gift card offerings (desktop, mobile web, mobile app, device agnostic), including the purchaser and recipient experience for both digital and physical cards of the brands’ own gift card. In total, each merchant was scored based upon 135 unique criteria. The full report can be downloaded here.

The report features data and analysis from the assessment of 100 U.S.-based merchants across 15 product verticals. Key components evaluated included ease of discoverability (e.g., gifting section of the website/app, site search), offering flexibility (e.g., ability to purchase other brands' gift cards, design options, delivery options), checkout/post-purchase (e.g., payment options, integration with loyalty program), and recipient experience (mobile wallet-friendly, split tender, balance check).

New product verticals added to the 2024 assessment included entertainment, gaming, online services, and travel. Other new elements added to this year's report are as follows:

• A customer loyalty trend synopsis, including actionable tips for integrating loyalty and gift card programs.
• Scoring broken out by brand-only gift card programs as well as those that sell gift cards from multiple brands (i.e., gift card mall).

Data was collected between September 2023 and December 2023. Criteria related to gift card promotions and the gifting section of merchant websites carrying gift cards were evaluated during the holiday season (December 2023). NAPCO Research's analysts went through the buyer and recipient experience, purchasing physical and/or digital gift cards from each of the 100 merchants evaluated.

What's At Stake

The reason this report continues to be produced on an annual basis is the growing value that gift cards can have on a merchant's top and bottom line. Consider the following: The U.S. gift card market is forecasted to produce a compound annual growth rate (CAGR) +6 percent during 2024-2028, reaching a value of $267.3 billion by 2028. In addition, digital gift cards are expected to record a CAGR of +8 percent during 2024-2028, reaching $115.3 billion by 2028. Digital gift cards are forecasted to account for nearly 43 percent of total gift card spending by 2028.

Furthermore, gift cards were the No. 1 most requested gift for the 2023 holiday season, marking the 17th consecutive year it has been atop consumers’ holiday wish lists. Growing consumer demand for gift cards, especially digital cards, presents a real opportunity for merchants to acquire new customers, retain existing customers, and increase their revenues.

Sharing the Assessment Data

The positive takeaway for merchants is that digital gifting scores reveal long-term improvement. In fact, digital scores are up 17 percentage points over the most recent five-year period. The below chart shows the average scores for the merchants across the associated digital channels for three of the years in that five-year period.

There’s an important distinction that needs to be made when looking at the 2024 data: Just 60 percent of the retailers assessed in 2024 were assessed in 2023 as well. The average total digital score among those retailers was 62 percent, a decrease of just 1 percent for these same 60 retailers year-over-year.

When looking at the data for the individual merchants that were at the top of the 2024 rankings, one pattern emerged: they were well balanced between the experiences they provided on both desktop and mobile devices. The average score for these merchants in the E-Commerce Digital criteria was 82 percent, with only a slight decline for Mobile Digital (81 percent). This speaks to the importance of having an optimized experience across all the channels where you sell gift cards. Here are this year's top performers:

In a follow-up video on the Benchmark Report: 2024 Digital Gift Card Leaders, U.S. Edition, to come next week, we will share our analysis of this year's data as well as best practices for improving performance across the gift card purchase and recipient experience. In the meantime, you can download the full report here.