Q&A with the New Retail Gift Card Association Board Chair:

by Colleen Dorwart 0

What is Impacting the Gift Card Industry Today?

Gift cards and egifts play an integral role in the payments industry—they are always in demand and provide consumers with versatile payment options. Gift cards will continue to be popular go-to prepaid tools in the future, but the industry is evolving and new factors and trends are impacting the gift card landscape.

The Retail Gift Card Association (RGCA) keeps a pulse on the closed-loop gift card industry, including new trends and innovations. It provides industry coordination among different stakeholders and members include top retailers, distributors, manufacturers and other non-retail organizations. This synchronized effort enables the RGCA and its members to promote positive gift card experiences for consumers and address new industry challenges as they arise via a unified voice.

We spoke with new RGCA Board Chair Colleen Dorwart, Senior Manager of Gift Card Services at Cabela’s, about her perspective on what factors and trends are impacting the gift card industry today.

How is technology impacting gift cards?

Most noticeably, we’re seeing purchasing and redemption channels converge before our eyes. It’s no longer enough to sell gift cards near the register at checkout and to only accept them at that same location. Consumers want the option of purchasing and redeeming gift cards in store, online, or even via mobile devices.

We’re also seeing disruptive technology that offers new ways for consumers to use third parties to buy and sell gift cards. Gift card exchanges provide consumers with a marketplace to sell unused gift cards and buy previously owned gift cards at a discount. Mobile third party distributors are creating one-stop shops for consumers who are looking to buy, give, or redeem gift cards for more than one merchant at a time from their mobile device via a completely digital process.

Consumers are also exploring non-traditional gift card storage options. Gone are the days of storing all of your plastic gift cards in your physical wallet – now consumers can store them in their mobile device or mobile wallet. In fact, our research found that 14 percent of shoppers prefer to store their gift cards in a mobile wallet. Furthermore, technology now exists for shoppers to link their mobile wallets to loyalty programs—enabling consumers to use their gift cards while also accruing reward points or qualifying for special deals.

What is the most important thing to consider when building a gift card program?

Customer experience. Purchasing and redeeming gift cards must be a positive experience for consumers to ensure continued growth and confidence in the industry. Our research found that flexibility and choice are becoming increasingly important to customer experience; more than 70 percent of Americans like the option of giving either a plastic gift card or egift, and two thirds say it’s important to give gifts that recipients can redeem online or in person. Providing consumers with the freedom to select which purchasing and redemption methods best suit their lifestyles can help boost industry growth and increase the likelihood consumers will continue to use gift cards and egifts as go-to payments tools.


How is fraud impacting the gift card industry?

Gift cards are safe, secure and convenient payment options for shoppers, but like all other forms of payments they can be abused by fraudsters. The RGCA and gift card industry stakeholders are proactively exploring ways to combat fraud to provide shoppers with the safest experiences possible. For instance, the RGCA works to provide ongoing educational opportunities for its members to ensure certain best practices are incorporated within gift card programs. It also encourages its members to use a variety of fraud mitigation tactics to stay ahead of scammers.

The RGCA has also developed tips for consumers to help avoid gift card fraud. These tips include avoiding demands for payment by gift cards (online or over the phone), why to only use reputable gift card exchanges and third party resellers, and checking gift card packaging for tampering before purchasing.

What’s next on the horizon for the RGCA?

The RGCA recently announced its inaugural standalone conference uniquely focused on the issues and trends impacting today’s closed-loop gift card industry. The RGCA Forum will take place October 2 through 4 in Kansas City, and will be a content-rich, interactive event that includes in-depth discussions on fraud, merchandising, secondary markets, digital platforms, and other timely topics surrounding closed-loop gift cards. Attendees will have the opportunity to attend sessions on issues specific to closed-loop payments, network with seasoned industry professionals and new technology companies, and participate in roundtables to identify industry best practices. For more information about the RGCA Forum, visit www.thergca.org.

We welcome those interested in participating to explore the event website.

Colleen Dorwart 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. The association’s mission is to protect, promote and enhance the use of retail gift cards.

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