Industry Insights
Gift Card Uplift: Why Customers Spend More Than the Card Is Worth
Gift cards return more than their face value because of how people behave at redemption. Value on a card reads as found money, and recipients treat the balance as a minimum purchase price rather than a ceiling. Studies cited in this research put it at 69% of recipients spending more than the card is worth, with 30% spending $25 more. That surplus is uplift, and it is additional profit.
Uplift Is Measurable, Not Anecdotal
The number only matters once it is computed. Ogloba's platform calculates the extra value of goods in a basket each time a card is redeemed — a $20 card against a $90 basket produces $70 of uplift — then averages that across a period and compares it with a standard average basket to produce a defensible figure. The system also stores the type of goods purchased, though not individual SKUs, which shows which products are regularly bought together.
The Economics Either Side of Uplift
Breakage adds a second line: an estimated $1.7 billion of card value went unredeemed in 2012 alone. Season shifting adds a third, spreading cost of goods sold across the year instead of concentrating it. And each card sale creates two customers, the buyer and the recipient, keeping subscriber acquisition costs low.
Uplift, breakage and low-cost acquisition are why these programs frequently pay for themselves.
FAQ
The platform takes the extra value of goods in the basket beyond the card balance — a $20 card against a $90 basket produces $70 — then averages that across a period and compares it with a standard average basket.
It stores the type of goods purchased, though not individual SKUs, which is enough to show which products are regularly bought together.
An estimated $1.7 billion of card value went unredeemed in 2012 alone, which sits on the programme's books as a second line of value beside uplift.
The buyer and the recipient are both brought into the programme by a single transaction, which is what keeps subscriber acquisition costs low.
Further reading
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