The gap between good and great gift card programs is widening. While most brands offer some form of gift card, the leaders are distinguishing themselves through more sophisticated direct digital experiences.
Sometimes referred to as first-party or owned gift cards, direct digital gift cards are purchased through a merchant’s own website or app.
As NAPCO Research uncovered in its 2026 Best Direct Digital Gift Cards Benchmark Report, conducted in partnership with BHN, direct digital gift cards represent an unoptimized revenue stream for organizations.
In a recent PaymentsJournal podcast, Sarah Kositzke, Global Insights Director at Blackhawk Network (BHN), Joe Keenan, Editor-in-Chief, Total Retail, aNAPCO Media brand, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the report’s findings, what they reveal about the evolving gift card landscape, and the strategies separating top performing brands from the rest.
Why Gift Cards?
The strongest gift card programs begin with a simple premise: gift cards are no longer a peripheral offering, but a key driver of revenue and customer engagement.
That opportunity is only becoming more significant. NAPCO projects the U.S. and Canadian gift card market will reach $547 billion by 2030, with digital gift cards accounting for roughly $216 billion.
This rapid growth is driven by consumers finding more reasons to buy gift cards and having more purchasing options than ever before.
“Consumers are buying about nine cards across the entirety of the year, and birthdays are a great example. But it works for the holidays and it works for teacher appreciation. There’s just so many different occasions where people are looking for that right gift,” Kositzke said.
“They might be like, ‘I think that so-and-so might like this brand’ and then you’ve got your multi-brand cards that help suffice for multiple things that somebody might be interested in, all the way to your open-loop cards like Visa and Mastercard,” she said.
Another growth catalyst is the increasing number of gift cards purchased through loyalty and rewards programs, reflecting the broader trend toward self-use. At the same time, consumers are giving gift cards for a wider range of occasions, including appreciation, condolences, or simply to surprise and delight recipients.
Even in categories where physical gifts have traditionally been the norm, gift cards are gaining traction. This is due in part to ongoing macroeconomic pressures, with many consumers operating under tighter budgets. In cases where a buyer can’t afford an entire gift, a gift card can still help the recipient put it toward a larger purchase.
“Wedding gifts can be big and expensive, and maybe they just want an experience,” Hirschfield said. “It’s buying a gift card to add to that versus back in the old days when I got married and you got one piece of china. Literally, people bought me a bowl. I don’t want that anymore, and the younger generation definitely doesn’t want that, so buying that gift card is a key thing.”
A Comprehensive Benchmark Report
Amid this surge in prepaid popularity, NAPCO Research evaluated the state of direct digital gift card offerings. In the ninth edition of its annual report, the firm assessed 120 North American brands—110 based in the U.S., and new this year,10 in Canada.
The evaluations were conducted using a secret shopper methodology, with assessors reviewing both the purchase and recipient experience and scoring each program against 147 unique criteria.
These criteria encompassed the entire purchaser and recipient journey across desktop, mobile web, and mobile app platforms.
“We’re looking at categories including discoverability, offering flexibility, the checkout and post-purchase experience, the recipient experience, marketing of gift cards, customer service, B2B programs, and credit card rewards,” Keenan said.
The company expanded its research to include 20 different product verticals, adding four new categories in 2026 — automotive and auto parts, discount and dollar stores, on-demand delivery services, and pet supplies.
In addition to expanding its evaluation segments, NAPCO introduced new criteria this year, including AI search, group gifting, animated cards, delivery notifications, and purchase flow integrity.
The report’s objective is not only to gauge the state of the gift card industry, but also to provide actionable insights. It also outlines best practices brands can use to strengthen their gift card programs, improve performance, and drive ROI.
“To help them do that, we’ve created this benchmark,” Keenan said. “We have year-over-year data, and then you can look at it and take a slice of it for the 2026 year and look at how your gift card program compares to those top performers—measuring yourself against your competitors and the retail industry at large.”
“It can be that learning tool to help accelerate growth within their own gift card programs,” he said.
How the Top Performers Invest
Overall, brands’ scores improved this year, but the average score of 67% indicates there is still room for improvement.
It is perhaps no surprise that this year’s top U.S. performers were some of the country’s largest retailers: Best Buy, Amazon, and Staples. The top Canadian brands were Lululemon and The Home Depot.
“What sets these top performers apart from some of the others?” Kositzke asked. “That high score was driven by discoverability. Are we able to find your brand’s gift card within that site [or app] easily? Are you promoting that card on your site, but also on other channels as well?”
“Are you offering that flexible delivery option, being able to meet that consumer where they are, being able to communicate to friends and family and colleagues exactly how you communicate with them today, but through the niceness of delivering a gift card?” she said.
Another common trait among the top performers is their investment in mobile experiences. This is intentional, as mobile commerce has begun to significantly outpace desktop-driven e-commerce.
As a result, brands should optimize the mobile shopping experience for both gift card buyers and recipients. For example, recipients should be able to easily redeem cards, check balances, and reload gift cards from their mobile devices.
Along with delivering a digital-first experience, leading gift card programs give customers more choice. Shoppers should be able to purchase both physical and digital cards..
That same flexibility should extend to delivery. While email remains a reliable option, customers increasingly expect to send and receive gift cards through their preferred channels.
“When looking at the data for this year, SMS delivery was a differentiating feature between top performers versus some of the merchants that were further down in the rankings,” Keenan said. “That’s something that organizations should think about incorporating into their own gift card program is that SMS delivery. It speaks to the growing popularity of mobile shopping.”
Areas of Opportunity
Despite overall improvements and a number of innovative features introduced this year, two areas continue to lag: marketing and customer service.
“We check for marketing a couple of times throughout the assessment,” Kositzke said. “Especially during that holiday time frame, are you marketing your gift card program to allow people to know that you have one, and here is the best solution for gifting?”
“Then also customer service, so being able to address issues and questions quickly,” she said. “Consumers are often in that mindset of, ‘Why can’t I have an answer now versus having to wait 48 hours or a week or seven days to get back to me on a question that I might have?’”
One key best practice is to regularly audit the entire gift card program by completing the full purchaser and recipient journey and identifying friction points throughout the process.
This step is critical because even minor points of friction can have significant downstream consequences.
“You want to build a checkout experience that works every time,” Keenan said. “It seems simple and self-explanatory, but you’d be surprised at how often there are snags in the gift card purchase process. And if that process doesn’t go through the first time, chances are you’re going to lose that customer. They’re not going to come back and try it a second or third time. It needs to work right the first time.”
Much More to Uncover
The brands that recognize this opportunity—and continue evolving their gift card experiences—will be the ones best positioned to turn a simple purchase into a lasting customer connection. By combining seamless mobile experiences, flexible options, and stronger promotion, organizations can unlock the full potential of gift cards as a strategic engagement channel.
That said, organizations must also remain agile as the preferences and expectations of younger consumers continue to evolve.
“Younger shoppers, primarily millennials and Gen Z, are increasingly turning to gift cards for affordability issues,” Keenan said. “They’re thinking about budgeting and how they can use gift cards for their own self-use or for gifting to others.”
Another force to monitor is technology, which—like every industry—has the potential to rapidly reshape the prepaid landscape.
“AI is a hot topic across every industry,” Kositzke said. “This past year, we included a couple of key assessment points around AI and being able to find gift cards. But to be honest, when we did the report for our partners, one of the key questions that kept coming up was, ‘What about this with AI and what about that with AI?’”
“When we think about those criteria for 2027, how do we level up some of the things around AI and how are we going to assess those?” she said. “Sometimes the most interesting things are the: ‘Hey, but we have so much more to uncover.’”
Read the 9th annual benchmark report with NAPCO Research.
