US E-commerce Gift Card Research 2026: Customer Experience and Profitability

Gift cards give online retailers a way to accept payment before a product is chosen, introduce a brand to a recipient and fund a later purchase. Whether that produces a stronger business depends on what happens between issuance and redemption: delivery, product margins, discounts, repeat orders and the cost of running the program.

1. Follow the whole gift card cycle

A retailer needs to distinguish two transactions. At purchase, somebody pays for stored value that can be used later. At redemption, the recipient chooses products, draws down the balance and may pay an additional amount. The buyer and recipient can be different people: Shopify’s recipient-field documentation, for example, treats their information and notifications separately.

That distinction changes the evaluation. Strong card sales can coexist with a poor recipient experience. A large redemption basket can produce little contribution after discounts and costs. A first-time recipient may disappear once the balance is exhausted.

The relevant sequence is discovery, purchase, delivery, redemption, margin and a subsequent customer relationship. Measuring only the value of cards issued leaves most of that sequence unexplained.

2. What the 2026 digital benchmark shows

The BHN–NAPCO 2026 Best Direct Digital Gift Cards Benchmark Report evaluates 120 existing programs: 110 in the United States and 10 in Canada. It uses 147 criteria across 19 retail categories, examining digital own-brand programs through both purchaser and recipient journeys. Observations were collected from September through December 2025, with holiday promotions reassessed in December 2025. The scores belong to the 2026 report and describe that historical assessment period, rather than a live September 2026 inspection.

Digital experience by channel

The reported experience scores are 81% for desktop, 77% for mobile web, 54% for mobile apps and 59% for device-independent criteria. The composite score is 67%. These percentages describe benchmark performance, not checkout conversion.

Desktop exceeds the app score by a calculated 27 percentage points. That gap identifies an area to investigate; it cannot be converted into a percentage of lost sales. A practical question is whether somebody can complete both purchase and redemption on a phone without being forced into a different device or channel.

Feature availability and marketing

Among the evaluated brands, 66% offered SMS delivery, 48% offered scheduled delivery and 5% offered AI-assisted gift recommendations. Separately, 61% met the report’s AI-search visibility criteria. The average marketing score was 34%, which is a score under the report’s methodology rather than the share of brands possessing a particular feature.

Feature presence alone does not establish a sales effect. For a retailer setting priorities, discoverability, correct recipient details and delivery at the promised time deserve attention alongside more advanced tools. A recommendation feature offers limited help if checkout loses the personal message or the card reaches the wrong address.

Differences between retail categories

The selected category scores are 83% for Online Marketplaces, 74% for Electronics / Office, 73% each for Health / Beauty and Sporting, 69% for Home Furnishings, 64% for Pet Supplies, 63% for Fashion and 57% for Gaming. They cover eight of the report’s 19 categories.

Online Marketplaces was previously classified as Mass Merchant. These are experience scores under the benchmark, not measures of category sales, market size or growth.

Programs to study

Selected US programs score 107% for Best Buy, 106% for Amazon, 100% for Staples, 96% for Target, 93% for TJ Maxx, 92% each for The Home Depot and Ulta Beauty, and 90% for lululemon. Bonus points allow scores above 100%.

The ranking describes the assessed experience, not gift card sales. These programs provide examples to study, while the appropriate implementation for an independent merchant may be much simpler, particularly with a narrow catalog or a single sales market.

3. Consumer intentions and reported behavior

TSG and Bank of America surveyed 1,002 US adults between February 5 and February 10, 2026. The responses concern gift cards generally, rather than ecommerce alone.

For ecommerce, these findings support investigating new-recipient acquisition, spending beyond the balance and employer distribution. They do not prove that any of those mechanisms produces incremental margin.

A checkout can show that a customer paid more than the value applied from a card. Establishing that the customer spent more than they would have without the program requires a credible comparison with the alternative.

4. Keep four instruments separate

Gift cards, store credit, rewards and vouchers can share technology while creating different economic relationships. Combining them under one sales measure obscures who funded the value and what the merchant still owes.

Shopify’s account-based store credit and Best Buy’s distinction between purchased cards and purchase-linked incentives illustrate why operational and accounting records need these categories.

Issuing $100,000 of free promotional credit is not the same as selling $100,000 of gift cards. Converting a $100 refund into store credit does not automatically create $100 of new revenue. A $100 card sold for $90 creates $100 of recipient purchasing power but only $90 of cash at issuance.

There is also a separate distinction between an own-brand card, redeemable against the merchant’s catalog, and distribution of another brand’s card. The former depends on later product sales and their margins; the latter depends on distribution terms and the intermediary’s revenue. Those activities should remain identifiable in reporting.

5. Seven commercial uses for online retailers

Help a buyer who cannot choose a product

The commercial hypothesis is that a gift card can preserve a purchase that would otherwise be abandoned because the buyer does not know the recipient’s size, preferred color or product choice. Purchases originating on gift-guide pages should be distinguished from direct searches for the brand’s gift card, because the underlying intent may differ.

Denominations also need to make sense against the catalog. If the balance cannot cover almost any complete product, the recipient’s required extra payment may create friction.

Serve a last-minute gift purchase

Rise.ai’s Dr. Squatch case describes gift cards serving shoppers who had missed the practical deadline for physical delivery. The proposed value is timely gifting, which can be assessed separately from a price promotion.

Relevant measures include conversion after the shipping cutoff, actual digital delivery times and incidents that prevent receipt. Payment review can delay issuance, so a digital format alone does not support an unconditional instant-delivery promise.

Introduce a recipient to the brand

A buyer can introduce the merchant to somebody who has not bought from it before. Evaluation should distinguish new recipients, existing customers receiving cards and buyers using their own cards.

Counting new customers only in the issuance order can miss the acquisition event. The recipient may first enter the product-purchase relationship at redemption.

Encourage a second purchase

Credit awarded after a transaction may be intended to encourage another order. The Kosas case below follows that logic by linking samples with a later full-size purchase.

The analysis needs both the probability of another order and contribution across the two orders. A higher repeat-purchase rate can coexist with subsidies to customers who would have returned without the offer.

Handle returns and service recovery

Store credit can support retention, refund workflows and service gestures. Ordinary returns should be distinguished from compensation for delayed deliveries, damaged goods or service errors.

The retained cash is only one part of the outcome. Product cost, another shipment, customer satisfaction and the possibility of accidentally issuing both credit and a cash refund all affect the result.

Open a subscription relationship

Bokksu’s historical Rise.ai–Recharge case illustrates a gift card introducing a recipient to a subscription. The first payment and automatic renewals must be evaluated as separate functions: accepting a card for the initial order does not establish that the balance can fund subsequent bills.

Sell to organizations

Employers and other organizations can buy a merchant’s cards for staff, customers or partners. Etsy publishes a dedicated process for purchases above $50,000, including bulk delivery options. That is an operating policy rather than a measure of corporate sales.

For the merchant, a corporate channel should be assessed through negotiated discounts, account-service costs and recipient behavior, alongside the value of the initial order.

6. Historical case studies and their limits

The following cases were published by Rise.ai about its customers. They provide examples of commercial mechanisms, not independent market benchmarks, current trading results or controlled estimates of causality.

Dr. Squatch: service recovery through store credit

For Q4 2020, the case reports approximately $287,000 of store credit issued, more than $197,000 of revenue associated with its use and $111,000 of spending beyond the credit. Bulk issuance supported customer-service operations.

The case demonstrates that infrastructure used for gift cards can also serve a support team. It does not establish product margins, logistics costs, the complete observation window or what purchases would have occurred without compensation. The $111,000 is reported overspend rather than profit, and the issued credit is not purchased gift card volume.

Kosas: moving from samples to full-size products

In Q4 2021, Kosas awarded credit for sample purchases that could subsequently be used for full-size products. The supplier reports nearly $500,000 of credit issued to more than 28,300 recipients, a reported redemption rate of 42.4%, approximately $585,000 in campaign revenue and more than $384,000 in upsell.

The published example includes a $35 sample kit and a 20-day promotional-credit window. These are historical details from the case, not current product pricing or a proposed expiry period for purchased consumer gift cards.

The mechanism to investigate is whether sampling reduces the perceived risk of trying a product and encourages a profitable full-size purchase. The case does not isolate the incremental portion of the second order, and its reported redemption measure and cohort are not independently audited in the public material.

Bokksu: gift cards leading into subscriptions

The early-2021 case covers two months and reports more than 700 cards, over $41,000 in gift card sales, 38.9% reported upsell and 41.82% of recipients becoming subscribers.

The result links a gift with a first product experience and a potential recurring relationship. A complete evaluation would also follow subscriber retention after the balance is used, contribution from those subscribers and a comparison with acquisition through other channels. The reported conversion and upsell measures retain the supplier’s definitions; neither is a market-wide rate or a profit percentage.

7. Retailer policies reveal different operating models

Chewy: account status affects redemption

Chewy’s US terms reviewed for this research specify a $2,000 maximum per card and a $10,000 daily gift card purchase limit per person. Guest checkout allows one card per order; customers using an account may use multiple cards. Ordinary gift cards do not expire, while promotional cards may carry the disclosed expiry date. A balance added to one account cannot be moved to another.

These are company limits, not average purchase values or industry standards. They also show why customers with the same total balance can have different experiences depending on account status, checkout route and card type.

Etsy: a marketplace-level program

Etsy’s documentation describes digital gift cards in six currencies, a custom-amount option and an account requirement for purchasing them. A gift card cannot be bought in the same transaction as items from another shop. Purchases above $50,000 are directed to support.

A gift card offered by a marketplace does not mean each seller has independently built a program. For an independent retailer evaluating alternatives, important questions include who holds the recipient relationship, manages the balance, sends communications and measures later purchases.

8. Audit the buyer and recipient journeys

Discovery and denomination

A practical audit starts with a dedicated page, navigation access, internal search and placement in gifting content. Candidate search phrases include gift card, e-gift, digital gift and last-minute gift. This is a proposed audit approach; search demand has to be established from the merchant’s own data.

Denominations should be compared with the price distribution of the catalog and recipient baskets. In an illustrative store whose main product costs $85, a $50 card may serve a different need from a $100 card. A higher denomination can also discourage the original buyer. The useful comparison considers purchase conversion, card value and redemption friction together.

Personalization and scheduled delivery

Buyer identity, recipient details, the message, design and preview need to survive quick-buy buttons and alternative checkout routes. A well-presented product form is insufficient if the data disappears before fulfillment.

Shopify documents scheduled delivery in compatible themes at approximately 4 a.m. to 10 a.m. in the purchaser’s time zone. That is not an exact recipient-selected delivery time. The audit should examine the promised date, applicable time zone, confirmation and handling of orders awaiting payment review.

Confirmation and recovery

Buyer confirmation and recipient delivery are separate events. Useful scenarios include an incorrect address, rejected email, spam filtering, a resend request and a recipient change before activation. Resending a notification must remain distinct from issuing a second card.

Redemption beyond the ideal checkout

Redemption needs to work when the balance is smaller or larger than the basket, when several cards are combined, when a discount is also applied, and when tax, shipping or special product rules affect the total.

Shopify’s documentation permits balances to be used across multiple orders, multiple gift cards to be combined and cards to be used with discounts. Gift card value applies to the order total, including shipping and taxes. These operational situations reveal more about program quality than the product page alone.

9. Platform choices change the economics

Platform comparison needs to separate native functionality, extensions, integrations and the charges incurred at different stages. A simple feature checkbox cannot describe the complete program.

Shopify: native capability with specific conditions

Shopify documents gift cards across all plans, with use in the issuing store and its Shopify POS configuration. Native redemption does not extend across separate Shopify stores.

For online stores created on or after May 12, 2025, Shopify documents third-party transaction fees on amounts paid using gift cards or store credit. Its detailed billing guidance specifies the waiver for Shopify Plus stores using Shopify Payments as their sole payment provider and separately excludes POS orders from these transaction fees. The applicable rate depends on the store’s plan and configuration; the research does not assume a universal percentage.