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It’s Gift Card Time … Here’s A Few Basics

Mothers’ Day, Graduations, Fathers’ Day. Weddings – It’s a busy time for gifts—and gift cards.

As a leader in the gift card industry, NGC sits at the nexus of gift card distribution, fulfillment and sourcing, at that time of the year when people think a lot about gift cards. Since we are a B2B provider, the way that our work translates to the consumer is that, when people are redeeming their points or miles in their favorite loyalty program, our company is one of the central distribution and sourcing points for managing the actual fulfillment. We get that gift card to the right person and in the right amount of time, so they can get that grill for Fathers’ Day, etc. Participants redeem their points in their program and we make sure that it happens. We pull the card, load the funds on it and then get it to the recipient.

From a business perspective, other businesses are our key customers. At some point, most businesses look for ways to reward and incentivize their employees or some segment of their target population. So, whether it's getting a consumer to join an affinity group or getting employees to act, gift cards, reward cards or some other type of incentive, help people say, “oh, I think I will do what you're asking.”

What we do is consult and help provide those gift card rewards and incentives. We do it physically or digitally. We work with each organization to determine how to provide the best incentive experience. And, if the business can use a reward in the form of a gift card, it becomes an exciting conversation to have with employees or people who are interacting with that business.

Some people may be concerned about gift card time limits, but the state of gift cards is strong and healthy. Congress passed the Card Act a few years ago that pretty much eliminated gift card expiration dates. A traditional gift card, a closed-loop gift card which is a card you can only use at a specific retailer, those cards never expire. The law protects card recipients when they get traditional, closed-loop gift cards.

Of course, there are open-loop reward cards that can be used as incentives. For instance, customers get a $100 Visa card when they purchase certain products. Those types of incentive/reward cards can, in fact, expire. Companies that facilitate the production of open-loop cards, will make sure that the card is clearly marked with the expiration date and then it’s up to consumers to make sure they use those rewards by that date or else those funds are no longer on the cards.

The point is that gift cards are easy to give. They're also not very expensive to get delivered to recipients and most of them do not expire. For the ones that do, they’re usually good for at least 6-12 months.

One last thing, as Millennials and Gen Z are growing up, we are rapidly becoming a digital society. While more and more people are starting to prefer shopping online and using digital gift cards, our recent analysis shows that there's still a high preference for three out of four consumers to prefer to redeem points to get physical gift cards. They still want to hold it and go into a store. But at the end of the day, it's just easier get that digital card and go shopping online. So, watch this space.