If you’re at all acquainted with the prepaid industry, you’re familiar with the fact that consumers love gift cards. But what you may not know is that rather than remaining static gifting tools, gift card uses, applications, and capabilities have been quietly expanding through the years. Gift cards are no longer just present options that line end caps; they’re becoming increasingly versatile forms of branded currency that are changing the way Americans make purchases for others and themselves, reward employees, create experiences and more.
We recently spoke with Retail Gift Card Association (RGCA) Board Chair Marina Hodges about why—and how—gift cards are remaining relevant, in-demand payment tools.
Contextual commerce is a term we’re hearing a lot lately. Can you briefly explain how it’s impacting the gift card industry?
Tools like Amazon Dash, Instagram Shop and other “Buy Now” options are increasingly encouraging seamless buying behaviors by meeting consumers where they are—often in-app. For instance, a person scrolling through her Pinterest or Facebook feed from her phone might not be actively shopping but could see an ad for a sweater she likes and can buy it without stopping what she was doing with a few thumb swipes. And she can pay for the sweater using a variety of payment tools—gift cards being one of them.
Just like credit cards, debit cards and open-loop prepaid cards, gift cards and egifts factor into the contextual commerce equation because they help meet consumers’ omnichannel demands while also driving purchasing behavior. Consumers that receive gift cards as gifts, buy them for self-use as part of marketing promotions, or earn them as rewards can use those cards just like other forms of payment—and not just by visiting retailers’ brick-and-mortar stores or websites.
Meeting consumers across the multitude of shopping channels available helps ensure brands are reaching the largest audience possible. Closed-loop gift card industry stakeholders have learned the value in ensuring gift cards can be used and accepted as forms of payment in a variety of settings—helping create positive brand experiences, encourage brand touchpoints and urge sales conversions.
Contextual commerce is driving change in the payments industry and gift cards are helping make it happen. New applications for gift cards as forms of stored value are not only helping consumers check out seamlessly but are also helping reinforce brand image, encourage engagement, and keep gift cards top of mind.
How does fraud impact gift cards as forms of branded currency in the contextual commerce landscape?
As with other forms of payment, fraudsters persistently look for new ways and avenues to abuse gift cards. Yet despite their best efforts, gift cards remain safe and secure payments tools thanks to a plethora of industry stakeholders that work hard to keep it that way—including retailers, processors, manufacturers, law enforcement, government agencies and more.
While gift cards can be abused by fraudsters, staying one step ahead of them is always at the forefront of our minds. Varying closed-loop gift card industry stakeholders, including the Retail Gift Card Association, are dedicated to continually sharing collective knowledge, pooling resources and expertise and collaborating to defend consumers from criminals and create industry best practices.
For those who aren’t familiar with it, what is the RGCA?
The Retail Gift Card Association (RGCA) is the only nonprofit trade association that represents the closed-loop gift card industry. We are comprised of more than 90 member brands that work collaboratively to protect, promote and enhance the use of retail gift cards.
We provide our members with ongoing, year-round access to continuing education opportunities to ensure they stay up-to-date on gift card trends, and we have several task forces that focus on promoting best practices and mentoring businesses that are new to the industry. Our goal with these initiatives is to support overall consumer confidence in closed-loop gift cards.
When the gift card industry is healthy, the entire retail industry thrives, so we work hard to facilitate a collaborative atmosphere that enables growth, supports the health of the industry as a whole, and creates positive gift card experiences for consumers.
Registration just opened for the second annual RGCA Forum. Can you tell us more about this event, and what you have in store this year?
Last year’s inaugural RGCA Forum was a monstrous success that had a tangible impact on the closed-loop gift card industry, and we couldn’t be more excited to build on that momentum. This year, we will again share new sought-after research, offer invaluable networking opportunities and provide exclusive industry intel, tackling hot topics like fraud, gift card exchanges, and new technology capabilities that enhance gift card experiences.
Forum 2018 will be held October 1 through October 3 in Nashville, Tennessee. Since the event coincides with our 10-year anniversary we will celebrate with a “Birthday Party” themed celebration and 10 surprise, fun activities for attendees to enjoy during the event.
Marina Hodges is the chair of the Board of Directors for the Retail Gift Card Association, the only nonprofit trade association that represents the closed-loop gift category. For more information on the RGCA Forum, or to register to attend, click here.