7 Key Aspects of a Global Gift Card Program
As brands expand internationally, gift cards have become essential for customer acquisition and for solving method-of-payment challenges. However, launching a global program requires careful planning to navigate market dynamics, regulations, economics, formats, and distribution channels.
1. Consumer Use Case
Consumer behavior related to Gift cards varies by market. In many regions, gift cards are seen as a gift-giving product that drives brand awareness and revenue, while in other places, like Latin America, Southeast Asia, and parts of Europe, they serve as self-payment solutions. Consumers in these markets either struggle with different payment options or simply prefer the pay-as-you-go nature of Gift cards. The benefit for brands is that Gift cards help overcome payment hurdles not addressed by other payment vehicles.
2. Global Gift Card Formats
Formats also differ across regions. While some markets favor physical cards, others prefer digital or alternative methods like PIN-on-Receipt (PoR), mobile wallets, and loyalty apps. PoR is particularly strong in LatAm, SEA, Japan, Southern Europe, the Middle East, and South Africa, for example. Increasingly, consumers are expecting brands to offer Gift cards in formats that meet their needs in their local market. Knowing the relative share of each format is key when developing a launch strategy in a new market.
3. Tax & Regulatory Requirements
Like the U.S., brands looking to expand into international markets must ensure their cards and policies comply with local tax laws and regulations. Some markets restrict values or allow expiration dates, while others may require Money Transmitter Licences (MTLs) or compliance with Know Your Customer (KYC) or Anti-Money Laundering (AML) laws. Understanding the requirements by country will help determine an efficient roadmap for expansion and is crucial to avoiding liabilities.
4. Escheatment & Breakage
Gift card escheatment and breakage laws vary globally, affecting how unclaimed balances are handled. Noncompliance can lead to financial penalties, making regional assessment essential.
5. Remittance & Currency Restrictions
Certain countries impose currency movement restrictions, which affect revenue transfers. While some markets allow seamless transactions and out-of-country remittances, others have stricter laws. Working with experts who understand the challenges can save significant internal resources, time, and money.
6. Global Reporting & Analysis
Tracking sales, redemption trends, and customer behaviors helps measure ROI. Understanding how gift cards drive new customers enables brands to refine strategies for maximum market impact. Reporting on a global level by country, retailer and format is essential when calculating the actual value of a gift card program in a given market and securing additional resources to support it.
7. Distribution Partners & Lead Times
Launch timing, production lead times, economics, and card manufacturer capabilities vary by country and can significantly impact any expansion strategy. Knowing these differences is key to setting appropriate expectations with stakeholders and ensuring an efficient expansion strategy. Partnering with local experts who understand these differences can help.
TDS Gift Cards operates in 40+ countries with 1.2M+ retail locations. Ready to expand? Reach out by filling out the form below.