What’s Next for Gift Card Processing? Our 2025 Predictions

As the gift card industry evolves, so too do the challenges it faces. For years, predictions in this space have revolved around themes like digitisation, consumer trends, loyalty trends, and holiday spending patterns. But heading into 2025, the conversation may shift to more fundamental topics. This year, we predict an intense focus on combating fraud, adapting to legislation demands in the US and further afield, and embracing technological innovation to meet both security and consumer expectations.

Here’s a closer look at the trends that we think are going to define the gift card industry in the coming year.

Fraud will drive gift card awareness into the boardroom

Fraud is an ever present concern for retailers, but the last 12 months have seen gift card fraud leap to the top table’s attention. Organised crime groups globally are targeting gift card systems with increasing sophistication, prompting major changes in how retailers manage and secure their gift card operations.

For example, Target recently announced a groundbreaking change in its in store gift card activation process. For decades, gift cards have been pre-encoded with the necessary credentials during manufacturing. Target’s new approach means that cards on display contain incomplete card data that can only be fully complete when a secure sticker is applied at the point of sale.

This may suggest that traditional methods of processing and activating gift cards (usually with sequential numbers) are reaching their end of life. Retailers must invest in modern, secure systems to protect against fraudsters while maintaining a seamless customer experience.

The price of tackling fraud will make card print costs rise

One immediate impact of the battle against fraud is the rising cost of secure gift card production and distribution. Measures like tamper-proof packaging and enhanced security features are becoming necessary, but they also come with higher costs.

For retailers, this means a greater emphasis on ROI analysis. Every element of a gift card programme – from design to transaction performance – will come under scrutiny. How effective is the new packaging? Is the added expense driving increased consumer confidence and sales? These are questions retailers can no longer afford to ignore.

The challenge will be to strike the right balance: maintaining affordability while enhancing security. The cost of inaction, however, could be far greater if fraudsters exploit weaknesses in outdated systems.

Different retailer approaches will create customer friction

One unintended consequence of these new security measures is the risk of fragmentation in the user experience. Different retailers adopting varying approaches – like Target’s secure stickers versus another company’s tamper-proof packaging – could create inconsistency for consumers.

Imagine buying a gift card from one retailer that requires additional activation steps, while another’s process remains seamless. This disparity could confuse customers and fragment a carefully built gift  card product uniform experience over decades.

The key will be collaboration. Retailers, processors, and technology providers must work together to ensure that security measures are standardised wherever possible, minimising disruption to the customer journey.

Legislative measures will follow 

If history teaches us anything, it’s that government intervention often follows consumer harm. Fraud-related issues, coupled with the potential for a fragmented inconsistent experience, could draw the attention of regulators.

In the US, legislative initiatives around gift card security are already underway, and it’s likely this momentum will spread internationally. While regulation can drive progress, it also risks creating burdensome compliance requirements for retailers. Striking a balance between proactive investment and responding to regulatory pressures will be critical.

Retailers must prepare for this eventuality by adopting technologies and processes that not only secure their gift card programmes but also demonstrate transparency and accountability. This could include advanced reporting tools, transaction notifications, and clear fraud management protocols.

Technology will be looked upon to provide solutions

At the heart of tackling fraud, reducing fragmentation, and meeting legislative requirements is technology. Legacy systems – once sufficient for managing gift card programmes – are now a liability. Retailers need scalable, flexible, and secure platforms to keep pace with today’s challenges.

Key technological advancements we expect to shape the industry in 2025 include:

1. Advanced encryption and non-sequential numbering: These features make it significantly harder for fraudsters to replicate or tamper with gift cards.
2. Transaction alerts and monitoring: Real-time notifications of suspicious activity allow retailers to respond proactively rather than reactively.
3. Data-driven insights: Enhanced analytics can help retailers understand performance trends, optimise designs, and pinpoint vulnerabilities.

Ultimately, retailers that prioritise these areas will not only protect their customers but also gain a competitive edge in the marketplace.

Data and transparency will provide differentiation

Another prediction for 2025 is the growing demand for transparency. Retailers increasingly want to know exactly what’s happening within their gift card programmes – whether it’s transaction data, fraud incidents, or customer feedback.

This push for transparency will drive the adoption of tools that provide real-time visibility into programme performance. Retailers will no longer be satisfied with retrospective reporting; they’ll want immediate alerts and actionable insights.

For technology providers, this represents a significant opportunity to differentiate their offerings. Those that can deliver cutting-edge analytics and notification systems will position themselves as invaluable partners in the fight against fraud.

Looking ahead

The gift card industry in 2025 will look very different from previous years. Fraud prevention, legislative compliance, and technological innovation will dominate discussions, forcing retailers to rethink how they approach gift card programmes. This level of scrutiny will mean that gift card performance will become more visible at a senior level, therefore driving greater attention to ensure that this area doesn’t create a weak point in the company, or customer experience.

While these challenges may seem daunting, they also present opportunities for forward-thinking retailers and solution providers. By investing in secure, adaptable systems and prioritising collaboration, the industry can protect consumers, build trust, and continue to thrive in the face of evolving threats.

As we head into 2025, one thing is clear: the gift card industry is entering a new era – one that demands innovation, vigilance, and a commitment to excellence. Are you ready for it?

How Savvy can help you tackle 2025’s challenges

The challenges facing the gift card industry in 2025 require modern, adaptable solutions, and that’s where Savvy excels. With our expertise, technology, and future-proofed platforms, we provide the tools you need to address fraud, scale your operations, and deliver exceptional customer experiences.

End-to-end gift card programme management

Running a successful gift card programme has never been easier. Savvy’s hassle-free, optimised management solutions cover every stage of your programme, ensuring maximum performance and customer satisfaction. Whether you’re launching a new initiative or enhancing an existing one, we streamline the entire process for you.

Advanced gift card processing and analytics

Fraud protection and operational efficiency go hand in hand with Savvy’s powerful processing and analytics solutions. Our modern API services integrate seamlessly into your business, giving you real-time insights and access to a vast distribution network to drive sales.

Industry-leading analytics

Savvy operates the only dedicated analytics platform in the gift card industry. By combining multiple data sets into a single, secure, cloud-based solution, we give you a unified, real-time view of your programme’s performance. Use these insights to make informed decisions, combat fraud, and adapt to market changes.

Future-proofed, scalable technology

Our cloud and API architecture is built for growth. Whether you’re expanding into new markets, onboarding more clients, or introducing new products, Savvy’s platform scales effortlessly to meet your needs. With global support and a focus on innovation, we’re here to help you stay ahead of the curve.

Unrivalled expertise and support

When you work with Savvy, you get more than just technology – you gain a partner dedicated to your success. Our team combines industry expertise with cutting-edge tools to deliver unparalleled results. From implementation to ongoing support, we’re with you every step of the way.

Want to learn more? Book a meeting with us today to find out how Savvy can transform your gift card programme for the future.