Learning about the gift card industry: 17 key terms you should know 

Like all industries, the gift card industry has its own set of terms and jargon. Here’s are 17 essential terms to learn if you are new to the industry or interested in testing your knowledge and understanding.  

1. Physical gift card: A gift card made of card, sustainable material or plastic which can be given in person or sent via post
2. Digital gift card/e-gift card: An electronic or digital version of a gift card that is delivered digitally and redeemed online (and in store where applicable)  
3. Issuer: The company or organisation that issues the gift card, typically a retail, leisure or hospitality business  
4. Recipient: The person who receives the gift card and can use it to make purchases 
5. Expiry date/period: The date after which a gift card becomes invalid and cannot be used to make purchases. Some gift cards have no expiration date, while others may have a specific expiry period  
6. Reloadable card: A gift card that can be reloaded with additional funds after the initial value has been used 
7. Closed-loop card: A gift card that can only be issued and redeemed by the same entity/company
8. Open-loop card: A gift card issued by one party that can be redeemed by multiple other parties that carry the logo of a payment network (e.g., Visa, Mastercard, American Express)  
9. Restricted-loop card: A gift card that is issued by one party that can only be redeemed within a limited network of affiliated merchants. 
10. Redemption: The process of spending a gift card either instore or online to purchase products or services  
11. Upspend: The additional spend made by recipients when they redeem their gift card, on top of the value of their gift card
12. Balance enquiry: The process whereby recipients can check the remaining value on a gift cards. Different issuers have different processes for this.  Some offer balance enquiries at POS only.  Others offer online balance enquiry services
13. Breakage: This term refers to the amount of money on a gift card that is never spent by recipients and expires.  For issuers, this is commercially beneficial as sales are made without goods or services being provided
14. Bulk order/delivery:  The process of ordering/delivering a large quantity of gift cards to a business or organisation for distribution or resale.  Bulk orders are often used for rewards, incentives, benefits and promotions for employees, customers and members   
15. API (Application Programming Interface): A set of rules and protocols that allow different software applications to communicate and interact with each other. In the gift card industry, APIs enable integration between gift card platforms and other systems and enable 24/7 delivery of digital gift cards  
16. Split tender: The ability to use multiple payment methods, such as a gift card and a credit card, to complete a purchase. This is useful when the gift card does not cover the full amount of the transaction  
17. Transaction fee: A fee charged for specific actions related to gift card transactions, such as balance inquiries, replacement card requests, or certain types of redemptions

Looking for help with your gift card programme, or want to purchase gift cards for your business? Contact us!