Gift cards have undergone a remarkable transformation in recent years, evolving from simple gestures of convenience into powerful tools that drive consumer behavior, boost employee morale, and support public welfare. Few know this space better than Anna Uprichard, vice president of commerce for Blackhawk Network (BHN), a global leader in gift card solutions.
With over a decade of experience in the field, Uprichard has seen firsthand how the £1 trillion global market has grown and diversified. “Gift cards are effectively a form of branded payment,” she says, emphasising how their utility has expanded to meet consumer and business needs in innovative ways.
In this in-depth conversation, Uprichard delves into the origins and evolution of gift cards, the opportunities they present for businesses, and the future of an industry that has become indispensable in modern commerce.
A journey into gift cards
Uprichard’s career journey began at the intersection of retail and financial products, giving her a unique perspective on how these tools operate. After starting her career at a startup focused on making financial products accessible in grocery stores, Uprichard joined Tesco Bank, where she was instrumental in launching its gift card program.
“Tesco, back in 2010, was amongst a small number of grocers that created a mall program, where you had multiple gift cards on a fixture that a consumer could browse and purchase,” she recalls. This approach was groundbreaking for the UK market, transforming gift cards into an entire retail category.
Now, as cice president of commerce at BHN, Uprichard oversees a vast network spanning 37 countries, 9,000 brands, and $27 billion in annual value loaded onto gift cards. “We shipped a billion gift cards across the globe last year,” she notes, highlighting the scale of the industry.
“We did some research, and what it showed us was that if a customer had a £10 gift card, 73% of those consumers were likely to spend more than the value of the card, actually spending £43 more.”
Beyond birthdays and holidays
While traditional occasions like birthdays and Christmas remain significant drivers of gift card sales, Uprichard is quick to point out that their applications have grown far beyond gifting. One of the most surprising trends is the emergence of ‘thank you’ as a key occasion, particularly for teachers.
“’Thank you, teacher’ is the second biggest gifting occasion in the UK after Christmas,” she reveals. Parents, seeking more practical and meaningful alternatives to chocolates or wine, have embraced gift cards as a way to provide teachers with greater choice.
Self-use is another growing trend, driven by factors like budgeting, anonymity in online purchases, and a lack of access to traditional payment methods. “If I load my funds onto a gift card, I can control my spend,” Uprichard explains. In the gaming sector, for instance, parents often buy gift cards for their children to avoid linking credit or debit cards to gaming accounts
A win-win for retailers
For retailers, gift cards represent much more than just an additional revenue stream; they are a strategic tool for driving foot traffic, increasing average transaction values, and enhancing customer loyalty. Uprichard explains how this works in practice: “We did some research, and what it showed us was that if a customer had a £10 gift card, 73% of those consumers were likely to spend more than the value of the card, actually spending £43 more,” she says. Even higher-value cards show similar patterns, with consumers often spending significantly above the card’s face value.
Moreover, gift cards are recession-resistant and inflation-proof. Uprichard elaborates: “If you are a retailer and you are selling a product, let’s call it a jumper, and that jumper used to be worth £30 but is now £35 due to inflation, the buyer might not be able to afford it. However, they can still buy a £30 gift card for your store.”
This ability to lock in customer spend while ensuring flexibility for the recipient makes gift cards an invaluable tool for businesses navigating economic uncertainty.
“If you’re in a grocery store and you’ve got a panel end fixture, there’s only a certain number of pegs available.”
Driving loyalty and engagement
Gift cards also play a critical role in employee reward programs and customer retention strategies. Uprichard notes that these programs are becoming increasingly important as businesses seek innovative ways to engage their workforce and retain customers.
“For employees, these reward programs allow them to exchange points for gift cards, which they can use on everyday essentials like groceries or larger purchases like furniture,” she explains. Similarly, businesses use gift cards to incentivise sign-ups, encourage repeat spending, and build loyalty.
Government initiatives have also turned to gift cards as an effective solution. During the pandemic, grocery gift cards replaced food parcels as part of free school meal programs, offering recipients greater flexibility and dignity.
Overcoming challenges
Despite their benefits, implementing a successful gift card program can pose challenges for retailers, particularly those new to the space. One of the most significant barriers is space. “If you’re in a grocery store and you’ve got a panel end fixture, there’s only a certain number of pegs available,” Uprichard explains. Retailers must carefully balance their assortment to meet consumer needs while maximizing return on space.
Another challenge is the need for a comprehensive assortment, including competing brands, to drive consumer interest. “You’ve got to make your peace with having a full and complete range, which may include those competing brands,” she says.
The future of gift cards
Looking ahead, Uprichard sees significant opportunities for growth, particularly in the digital and social commerce spaces. “Gen Z and millennials are hanging out in the social commerce space, like TikTok, Instagram, and WhatsApp,” she observes. However, gift cards have yet to establish a strong presence in these channels.
She envisions a future where consumers can seamlessly browse and purchase gift cards directly within social platforms. “It has to be easy and seamless because anything with friction tends to fail,” she emphasises.
“If you don’t have a gift card and you’re not in these programs, you’re effectively missing out on capturing that consumer spend.”
The omnichannel approach is also critical. “Consumers are expecting convenience in the way they shop. They might want to browse a full range of gift cards online and then go into a store to buy them, or vice versa,” she explains. Retailers that can meet these expectations are well-positioned to capture a larger share of the market.
The resilience of the gift card industry is perhaps most evident in its ability to adapt to consumer concerns. The rise of multi-retail cards, such as BHN’s One4all product, reflects a shift in consumer preferences. “These cards allow consumers to spend across multiple redemption partners, providing flexibility and peace of mind,” Uprichard says.
This adaptability has helped the industry weather economic challenges while maintaining strong consumer demand. “Consumers really want this,” she asserts. “If you don’t have a gift card and you’re not in these programs, you’re effectively missing out on capturing that consumer spend.”
Lessons from retail’s past
Reflecting on the broader retail landscape, Uprichard underscores the importance of staying attuned to consumer needs. She cites the challenges faced by retailers like The Body Shop as a cautionary tale.
“What you were seeing is perhaps a retailer that was unable to respond to new and emerging customer needs,” she says. The rise of omnichannel shopping, where customers expect seamless transitions between online and in-store experiences, underscores the need for adaptability. “Meeting those customer expectations is critical for all retailers going forward.”
Anna Uprichard’s insights reveal an industry that is not only thriving but constantly evolving to meet the needs of consumers and businesses alike. From driving customer loyalty to supporting public welfare, gift cards have proven to be a versatile and resilient tool in the retail landscape.
As Uprichard aptly puts it: “Gift cards are a major business that consumers really love and are engaging with.” Her message to retailers is clear: those who embrace the opportunities presented by gift cards will find themselves better equipped to navigate the complexities of modern commerce.
