How To Find A Provider For Distributing Gift Cards and Prepaid Cards

Companies of all sizes and in all industries rely on digital gift card providers when they want to simplify their reward and incentive programs. 

Whether they need to fill their pipeline, engage their employees, incentivize survey participation, or retain customers, digital gift cards are always the easiest, most cost effective way to go. 

That said, how and where they source their digital gift cards will always have an outsized impact on the success of any programs. Choosing the right gift card partner will make or break an incentive program, even before it starts.

Yes, sending gift cards to recipients can and should be easy. But that’s only the case if you choose a gift card distribution company that simplifies the whole process and has the right features for your needs.  

In this article, we’ll explore how to choose the best digital gift card provider for your rewards and payout programs. We’ll also cover some red flags to watch out for, as well as some signs it might be time to switch providers. 

Incentive programs need simple solutions

First things first. If you’re responsible for running your company’s incentive programs, then you need an affordable distribution partner that will make your life easier. This is the ultimate criteria you should use when evaluating your options. 

Maybe you’re currently using software for your incentive program, but you find yourself struggling with an opaque onboarding process, chasing down your account manager, doing extra paperwork, and dealing with unhappy recipients. 

Or you’re paying extra fees to send your rewards, and your boss is wondering where all that extra money is actually going. 

Perhaps you’re running your program without a gift card platform. If that’s the case, you might be spending up to 25% of your time each week (or more) manually buying, sending, and tracking gift cards. 

Or you’ve just been tasked with finding a gift card distributor for a new incentive program your company is going to try out, and you're not sure where to get started. 

In any of these situations, there’s an easy fix. You just need to find a gift card platform that:

• makes it swift and easy to get started
• simplifies the process from start to finish
• integrates with your existing tech stack and workflows
• doesn’t charge fees or require exclusive contracts or minimums (so sending a $50 gift card, for example, will only ever cost you $50). 

We’ll cover exactly how to find that right platform next. 

"I like things that are intuitive and keep it simple. Giftbit is really easy to use, and I think that is probably the most important feature of any tech product." 
—Greg Augustine, Project Manager — Prime46
See how Greg saves 10 hours a week on incentive fulfillment 

Find the best eGift card provider for your company: 5 must-have features

Spending the time upfront to find the best gift card provider for your business is always a worthwhile investment. You need to find a company that is going to be a partner in your long-term growth, i.e. one that will support your goals and scale with your operations. 

Taking time now to find a platform that simplifies gift card management can also save you inordinate amounts of time in the future. 

Specifically, that means looking for reward providers that actually provide the following five key features. 

Simply put, if you want your gift card program to have long-term success, the following features are all non-negotiable. 

1. Support for all types of cards

Time for a little gift card terminology lesson. 

There are two types of cards you can send your recipients: open-loop cards and closed-loop cards. 

Open-loop cards are prepaid cards like prepaid Visa and MastercardⓇ which can be used in all sorts of places, usually both in-store and online. They offer a lot of flexibility and are great for general rewards and incentives, where you want recipients to have the freedom to choose how to use their funds. 

Closed-loop cards, on the other hand, are specific to a particular retailer or brand, like a Starbucks or Amazon gift card. 

These cards are perfect for targeted promotions, marketing campaigns, and customer retention strategies. 

They’re also great if a company wants to treat all their employees to lunch, for example. Send everyone an Uber Eats card and a Zoom link, for example, and your whole distributed team can enjoy a remote lunch together.  

Don’t worry: you DON’T need to remember these terms or any of the intricacies of the gift card business model. 

What you DO need to know is that some of the larger gift card reward providers focus on open-loop cards (i.e. those Visa and Mastercards), to the exclusion of of closed-loop cards (i.e. those gift cards to to places like Walmart, Target, Apple, and Kroger). 

These companies might try to shoehorn you into using open-loop prepaid cards (i.e. those Visa and Mastercards), because they make more revenue that way—even if it’s not the best option for the success of your program. 

Some also will use open-loop cards to monetize your audience for themselves.

For example, they might require your recipients to download a separate app to be able to store and use the Visa card you send them. Again, this might be good for them. But it's cumbersome and can add friction to the reward process for your recipients, negatively impacting the overall success of your program.

Pro-tip: Try to avoid gift card partners that require your recipients to download an app to access their rewards. 

Ultimately, if your provider doesn’t have strong support for store-specific gift cards, that can limit your flexibility and reduce the effectiveness of your reward program. 

So it’s important to select a provider that treats both types of cards (open and closed loop) with equal importance, ensuring a seamless experience for your recipients and maximizing the impact of your gift card strategy. This can help ensure your gift card program remains versatile and user-friendly, meeting the diverse needs of your recipients without added hassle.

Pro-tip: Look for a provider with a robust and global catalog of gift card and prepaid card brands, along with charity options.

Bonus points if you’re able to give your recipients full access to this catalog, so that they can pick and choose which gift card they want.

Better still if you have flexibility over how you deliver those gift cards, whether via email, text, social DMS, or QR code, individually or in bulk.  

2. Strong support for small and medium-sized gift card programs

Every gift card distribution company you’re evaluating is going to say they offer great support. The real question, which you might not find out until too late, is do they really offer great support to all of their customers? Or just the top 10%? 

It’s critical to find a gift card partner that is going to be passionate about and invested in your program’s success—no matter how big it is. You’ll want a company that’s there every step of the way, ensuring that all aspects of your program are always supported. 

That’s why customer support is especially crucial when companies planning small or mid-sized incentive programs are evaluating gift card providers. Otherwise, if you’re not what they consider to be a top customer, then you’ll often find yourself receiving less attention and much lower quality service. You can expect long wait times, for example, and have a hard time reaching a real person when you need help. 

This lack of responsiveness can seriously impact the effectiveness of your gift card program. So it’s important to choose a provider that values every client, regardless of size. 

Specifically, look for a company that will give you dedicated account managers, responsive customer service, and resources tailored specifically for small and medium-sized businesses. 

At the end of the day, having a supportive and responsive provider will be the key to the overall success of your gift card initiatives, giving you peace of mind and the ability to focus on all the other important aspects of your day-to-day. 

“We've had incredible account management support and the team has been great getting us to where we need to be.”
—Jenna Adrian, Head of Operations — Zogo
See why Jenna calls Sofia Baltasar, her Giftbit Customer Service Representative, a ‘12 out of 10 Rockstar.’ 

3. Commitment to YOUR innovation and flexibility

Choosing a gift card provider that prioritizes innovation is essential for keeping your rewards program fresh and effective. 

Specifically, that means avoiding any company that wants to lock you into long-term contracts. Larger gift card companies often have massive and complex legal agreements that require exclusives and minimums that are better for their bottom line—not yours. 

And they can be more focused on maintaining their existing infrastructure, rather than developing new features. 

This in turn can stifle their pace of innovation and flexibility. 

“Exclusivity is a business tactic that really should have gone away in the ‘80s and ‘90s,” says Nat Salvione, Giftbit CCO.  “It’s too old-fashioned, and it kills innovation.”

Instead, find a provider that continually invests in new technologies and listens to customer feedback. This ensures you have access to evolving features, so your program remains dynamic and responsive. 

"Order as much or as little as you want from us, and we’ll demonstrate value to you by doing a good job. 

We believe that digital rewards and incentives simply work the best for most businesses, and that if your program is transparent and we make it easy to send, you’ll keep using us" 
-Giftbit CCO Nat Salvione

4. Fair and simple pricing and account management

Great account management is vital when choosing a 3rd party gift card provider. Simply put, simple account management allows you to focus on running an effective incentive program without being bogged down by administrative hassles.

Remember, some providers will lock you into complex and lengthy contracts, sometimes for up to three years or more. 

Additionally, there are still providers that charge extra fees. For example, some gift card platforms charge 25 cents for every gift card activation. These types of unnecessary fees can quickly add up and erode your budget.

So try to avoid companies that are going to charge you any fees to use their platform and send rewards. 

“We believe that when a company pays money for an incentive, all of that cost should go to the incentive itself,” says Nat. “The most effective incentives programs are ones where the entire budget goes to the reward.” 

Meanwhile, having to manage complex paperwork, continually follow up on issues, or deal with a confusing onboarding process can be overwhelming, especially when just one person is responsible for overseeing a gift card program. 

You also want to avoid companies that have a complex ‘Know Your Business’ process (more on that below) and other cumbersome admin work.  

Pro-tip: Choose a provider that offers ‘use at will’ or ‘pay-as-you-go’ agreements, transparent pricing, no exclusives, and straightforward paperwork.

This ensures you can manage your program efficiently without unnecessary complications or hidden costs. 

A lightweight ‘Know Your Business’ process

Time for a little ‘inside baseball’ for anyone who has already worked with a gift card provider—specifically for anyone who’s been burned by a cumbersome ‘Know Your Business’ process. 

"Know Your Business" (KYB) is a crucial process in the gift card industry. It’s something every gift card platform needs to use, in some form or another, to ensure the customers they work with are legitimate and comply with legal regulations. The process involves verifying the identity and authenticity of a business, which is essential for preventing fraud and maintaining the integrity of the platform.

In the context of gift card providers, KYB procedures typically include the collection and verification of various business details, such as business registration details and tax identification info. 

Coming back out of the weeds, the important thing to know here is that KYB procedures are not all the same. 

And some gift card providers make the process a lot more cumbersome and time consuming than it needs to be. 

Since you’re dealing with financial and sensitive information, of course you want to select a company that prioritizes safety and security. 

But a stricter, more involved KYB process doesn’t necessarily make your program safer—it just makes your life a lot harder. And it can make it take a lot longer to get your program up and running, too. 

So you’ll be doing yourself a big favor by finding a provider with a lightweight KYB process. 

Pro-tip: finding a SOC 2 compliant gift card platform will make your IT and compliance team’s lives way easier, too.

5. A big, global, accurate catalog

Your online gift card provider is ultimately only as good as its reward catalog. If you can’t give your recipients reliable gift cards to brands they actually want, then expect your program to be doomed from the start. 

“Having a reward that works ensures the recipient is happy to receive it and actually able to use it,” says Nat. “It capstones your entire program.” 

Think about all the legwork you’ll need to do before you send someone a gift card. 

For example, imagine your company has decided to run a referral program to get more high quality leads. 

If this is the case, then you’ll have to set up tracking for the referral program, market the program, and then recruit your best customers to act as brand ambassadors. 

And once one of your best customers has actually made that referral, you’ll likely want to verify it before you finally send the digital reward. 

Now imagine that this customer gets their reward, and they’re really excited to use it. Maybe they decide to use it the next time they stock up on groceries. They fill up their grocery cart even higher than normal, excited to be able to get a big discount when they get to cash. 

And then, after they get all their groceries loaded onto the conveyor belt, the cashier has rung in their order, and they go to pay … their gift card doesn’t work. 

This will immediately transform your happy and enthusiastic advocate into an embarrassed, frustrated, and irate recipient.

In short, all that work you and your company did to reward this referral has now been undone by reward delivery mismanagement. 

And what should have been a big celebratory moment for one of your most loyal customers turns into a negative and very disappointing experience. 

Ultimately, a gift card might not work for a variety of reasons. Issues such as incorrect terms and conditions, improperly configured barcodes, incorrect formatting, or inaccurate region restrictions can all cause a gift card to fail.

There’s even more potential for inaccuracies to slip in when companies choose to use gift card API to offer gift cards through their own channels, such as through their own app or platform. High-scale automated systems depend on correct data in the right fields and formats. Mistakes in these areas can lead to significant operational disruptions.

Thankfully, this doesn’t have to happen to you—or your recipients.

Of course, mistakes do happen. But horror stories about gift card errors are all-too-prevalent in the gift card industry. And there are definitely big names in the industry who haven’t prioritized having a reliable, working catalog system. 

These types of mistakes are far less likely to happen when your reward provider prioritizes having a seamless and functional reward system. Negative experiences like the one we just described are preventable with accurate catalog management.

So look for a company that doesn’t take their catalog for granted. 

For example, at Giftbit, our Head of Partnerships Lindsay Page is a leader in the fintech, payments, and reward services industry. She’s passionate about how she and her team can support our clients by building the most accurate and robust catalog in the industry (and she’s also a stickler for detail! 🙌). 

"We always keep the end cardholder in mind when we wrangle all the details. Their positive experience using the card reinforces the whole goal of the incentive program." 
-Giftbit Head of Partnerships Lindsay Page

Nat agrees.

“We continuously invest in our catalog and how accurate it is because we know it’s paramount to delivering a positive user experience,” he says. “By choosing a provider with meticulous catalog operations and accuracy, you ensure your reward programs run smoothly and that your recipients enjoy a hassle-free experience.”

Set up a successful, sustainable, and scalable gift card program with the right gift card provider online

Ultimately, the success of your gift card program is going to come down to the provider you choose. That’s why you should focus on finding one that will be your partner in the process.

“We focus on executing the delivery of rewards in the easiest, most cost-effective ways possible, so that our customers can focus on executing their programs and ensuring they’re meeting all their business goals,” says Nat. 

Giftbit is a committed and sustainable gift card provider for programs of all sizes, with transparent pricing and revenue sharing options available.

Sign up for a free account to get started, or chat with our sales team for more information.