Trends Report: Gift Card Merchants Embracing Omnichannel, Aggressive Fraud Protection
Originally published by Incentive Mag on December 31, 2018.
Gift card merchants are making major progress in offering their products across all purchase channels while investing in aggressive fraud protection. At the same time, merchants could be doing more to maximize revenue from self-use purchases and to improve their compliance with the Americans with Disabilities Act. Those were among the trends spotlighted in the recent “Merchant Gift Card E-Commerce Evaluation,” conducted by NAPCO Research and sponsored by CashStar. The study, which measures the purchase experience for 100 different merchants’ gift cards, not only offered rankings of top-performing brands and statistics on what they were doing well or could improve, but also looked at general trends in the gift card sectors across the board, spotlighting several areas of general strength and opportunities for improvement.
The major trends outlined in the report were:
• Omnichannel Offerings. The evaluation found that 51 of the 100 brands reviewed offered both digital and physical gift cards across desktop, mobile and (when applicable) mobile app. This marks an improvement over last year’s study, which found just 36 merchants with such omnichannel offerings. But while brands are improving, the study’s authors emphasize that more progress needs to be made, with just eight of 87 brands offering a commerce app with an in-app experience scoring at about the same level as their desktop purchase experience.
• Limited Payment Options. While a growing number of gift card merchants are making their offerings available across channels, they still have work to do in allowing a range of payment options. “This is particularly true for mobile, where it’s even more critical to offer easy payment options such as PayPal and Apple Pay, which minimize the amount of data entry needed as well as make transactions more secure,” writes the report’s authors.
• ADA Compliance Lacking. For the first time, the report measured merchants’ compliance with the U.S. Department of Justice’s Americans with Disabilities Act Standards for Accessible Design, which offers rules for ensuring interaction with websites an online information is accessible for those with disabilities. While merchants “performed well” for the most part, according to the report, with nine brands receiving the maximum score, but the majority of brands falling in the middle, “meeting some of the needs of visitors with disabilities, but at the same time not doing everything needed to maximize their score in this category.”
• Opportunities in Self-Use. “Despite the consumer demand for self-use of gift cards, the brands we evaluated are not yet catering to this behavior,” the report states, noting that 74 of the merchants reviewed received zero points on this criteria. “What this tells us is that much like B-to-B, self-use presents an opportunity for merchants to accommodate buyers with a specific need.”
• (Over)Aggressive Fraud Protection. While one of the most important shifts to happen in the gift card sector has been a growing concern with protecting both merchants and purchasers from fraud, the research finds that these efforts may be affecting merchants’ bottom lines. Specifically, it found that a growing number of legitimate orders were being declined as potentially fraudulent compared to years past. To avoid these “false positives,” the report’s authors suggest merchants partner with third-party providers who have expertise in fraud protection.
The full report, including specifics on mistakes merchants are making and takeaways they should consider, can be downloaded here.