Industry Insights
Merchandise Returns on Gift Cards: Turn Refunds into Repeat Visits
Should a retailer refund returns in cash, or in store credit? For most closed-loop programs, credit on a merchandise card is the stronger answer — it protects margin without punishing the customer.
Returns Are Structural, Not Exceptional
Roughly $642.6 billion of goods are returned globally each year, and as many as 58% of customers return something. A returns policy is therefore an operating decision, not a courtesy. When the refund is loaded onto a gift card, the value stays with the issuing retailer: non-faulty goods go back into saleable inventory, and the customer still holds spending power inside the brand.
Credit Changes Behaviour
Cardholders treat a balance as a minimum spend threshold rather than a ceiling — industry research puts uplift, spending above face value, at as many as 69% of holders. Cash can be spent anywhere; card credit brings the customer back through the door, frequently for a larger basket. It also narrows the opening for return fraud, estimated at around 6% of returns, because cash is what fraud is hunting for.
Where the Platform Matters
Ogloba's gift and loyalty card infrastructure lets retailers issue refund value at the till, configure redemption rules, and track balances across stores, so the returns desk becomes a re-engagement point rather than a leak.
The policy is commercial. The platform is what makes it enforceable.
FAQ
Roughly $642.6 billion of goods are returned globally each year, and as many as 58% of customers return something — which makes the refund policy an operating decision rather than a courtesy.
Non-faulty goods return to saleable inventory and the refunded value stays with the issuing retailer, with the customer still holding spending power inside the brand.
Because cash is what fraud is hunting for. Return fraud is estimated at around 6% of returns, and refunding to a card narrows that opening.
The ability to issue refund value at the till, configure redemption rules, and track balances across stores — that is what turns the desk from a leak into a re-engagement point.
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