Gift cards, vouchers, fashion cheques — how relevant are they in today’s fashion industry? Do we still give friends and family store credit for their favourite brand? And just how profitable is it for (online) stores to offer their own branded gift card? Can gift cards even help during challenging times, like the COVID-19 pandemic? Buckaroo explored the answers.
Danny Boersma works at GivaCard, a well-known gift card issuer in the Netherlands and Belgium. For over 12 years, they’ve been the driving force behind many gift cards you see in hospitality, retail and online checkout displays. They collaborate with cash register systems and payment service providers. The gift card market continues to grow, with 20% year-on-year growth. So what’s the impact of COVID-19? Danny says: “We’ve seen a slight increase in gift card sales, but not the surge people expect. A gift card is no miracle cure. Retail success still depends on the retailer’s creativity and drive. That said, a custom-branded gift card can certainly boost loyalty and cash flow.”
Branded gift cards can be highly profitable. “They directly improve cash flow — no doubt about that,” Danny explains. “You receive the revenue upfront when the card is sold. And once the card is redeemed, the spending amount is often much higher than the card value.” Even during the 2008 financial crisis, gift card sales remained stable — not just for general cards like the FashionCheque or VVV card, but also for store-specific ones. During COVID-19, however, a new challenge emerged: how do you obtain a gift card when stores are closed and everyone is staying home?
“An online integration is a must — it already was, but now even more so,” says Danny. If your gift cards are handwritten or not linked to your online store, customers can’t redeem them digitally. That’s why you need integration with a Payment Service Provider (PSP), like Buckaroo. Buckaroo works closely with GivaCard. Billy Kielman, payment specialist at Buckaroo, adds: “Your own gift card can be added to your checkout as a payment method. If the customer has a remaining balance, they can top it off with iDEAL, credit card, PayPal, or even another gift card.”
Why should stores *want* their gift cards to be redeemed? Isn’t it better if the card stays forgotten in a drawer? Danny explains: “Redemption is actually better. Research shows that on average, customers spend 3 to 5 times the card’s value when redeeming it.” That overspending is great for revenue. Plus, it brings someone into your (online) store. They might be a first-time customer — a perfect opportunity to create brand loyalty. And even if they’re a returning customer, the gift card encourages repeat visits and re-engagement. The person gifting the card has already connected your shop with the recipient’s taste. The chances of a successful conversion are high.
One great example is fashion webshop Girav. Their gift card is more than a simple voucher — it’s a brand experience. Packaged in a sleek black sleeve with a shiny card featuring their blue logo, it stands out. Why does it work? Jordi van Staveren, shop manager at Girav, explains: “Not everyone shopping our site is buying for themselves. People want to give shirts as gifts, but making choices for someone else can be tricky — polo or t-shirt, V-neck or crew, what size? The gift card solves that dilemma and prevents shoppers from endlessly browsing only to abandon their carts. It supports both conversion and customer experience.”
Is it expensive? “You can get started digitally from just €95,” Danny says. “That includes a 6-month subscription, integration with your POS and PSP, and a custom digital gift card design. After 6 months, it’s €25 per month. If you want physical gift cards, they’re available from €1.25 per unit (minimum 250 cards), complete with envelopes and optional luxury packaging.” And the best part? You keep the full margin — unlike general gift cards like the VVV-bon, where a percentage goes to the issuer. With Buckaroo, you only pay the transaction fee.
So, you’ve launched your gift card. Now what? Danny says: “Be proactive. Promote it actively — it makes all the difference. We see stores that actively promote their card sell up to 60% more than those that don’t.” His tips? Use social media, place a display in your physical shop (provided by GivaCard), and showcase the card on your homepage. Presentation matters. Make sure the card says ‘Gift Card’ and not just your logo. And make it visually appealing. Go all-in with luxury packaging if you can. You can also use your gift card as a promotional tool — for example, offer a €5 gift card with a customer’s first purchase to encourage repeat visits. There are endless options, but ultimately, how much value you gain depends on your own creativity and effort. Most importantly: make sure your gift card can be redeemed online.”
Want to offer your own gift card? You can get started directly via Buckaroo. Our payments experts are happy to advise you on your checkout and connect you with GivaCard if needed.
An extended version of this article was originally published on FashionUnited, May 2020.