What’s one thing consumers see more of during the holidays than sweaters, snowmen, or ornaments? That’s right, gift cards. They’re in the usual places—at checkout counters and online when we’re doing our holiday shopping. We’ll also see them in our loyalty apps as rewards from our favorite brands. Or in HR portals as a holiday gift card from employers, and in our inboxes as part of marketing promotions.
Gift card rewards are intended to help businesses motivate, connect, recognize, and reward. The end-user experience is supposed to be magical—generating a genuine moment of delight.
But despite the best intentions, many gift card reward moments end up having one thing in common: they’ll be forgotten.
That’s a problem for businesses.
The magic has died
When it comes to loyalty, emotional engagement is still the top driver of success. But for too many recipients, that magical spark they should feel when they get gift card rewards is dim at best.
Physical cards are easy to lose. Generic digital rewards feel impersonal. And some rewards can just be confusing to redeem. That kind of friction kills the moment. Worse yet, it can actually add stress during arguably the most hectic time of the year.
When gift card experiences feel outdated or complicated, they don’t create an emotionally positive moment; they do the opposite and create a burden. And then, reward value often goes unspent, and the business opportunity evaporates. What was intended to be a powerful engagement tool during peak shopping season signifies nothing more than a relic burdened by inconvenience. This strips away the joy of the gesture and defeats its entire purpose.
Gift card rewards need to catch up to consumer expectations and deliver the magic again.
Emotional moments drive motivation
How can businesses create a positive emotional impact? Programs that design the best experiences often turn to behavioral science. For instance, the Peak-End Rule shows that people remember the most emotionally charged moment and the ending of an experience most vividly. For a gift card reward, this could mean a surprise, personalized, and branded message at the end of the transaction.
The Goal-Gradient effect tells us that visible progress drives emotion and action. Imagine a reward that lets the recipient know they’re just two taps away from redeeming a gift card at their favorite brand. Sharing how close they are to success is proven to motivate users to complete tasks.
Finally, providing simplicity and relevancy is also confirmed to change behavior, according to the EAST framework (Easy, Attractive, Social, Timely). Businesses can apply those principles by delivering rewards instantly and offering tailored, relevant merchant options. Too many options, and users get overwhelmed. Not enough, and they’ll pass. With AI advancements in payouts technology, modern programs can use data analytics to provide the right menu of options for each recipient.
When a gift card experience is magical—and personal—it’s more likely to be remembered. And more likely to motivate future behavior.
Gift card experiences must be memorable
On average, people belong to a dozen different loyalty programs. That means, when it comes to reward experiences, businesses can’t just blend in with the noise or offer poorly designed redemption processes.
We know shoppers don’t put up with friction. Nearly 3 out of 4 people will bail on a purchase if the process is annoying. The same happens with reward redemptions. Every time more friction is introduced, the likelihood of a conversion failing increases. Every extra step required increases the chances the recipient will bail.
At the same time, the push for ultra-seamless experiences has created a new trap: invisibility. If the experience is so smooth that recipients barely notice who the reward came from or why, the value lands, but the meaning doesn’t.
Reward interactions thrive on salience. The best gift card experiences this holiday season will combine frictionless design with a clear moment of recognition—turning touchpoints into memories.
Transactional must evolve into relational
The future of gift card rewards lies in merging magic with modern. That means upgrading not just the format, but the fundamentals for year-round efficiency:
1—Wallet-native integration
Gift cards should live where payments happen—inside digital wallets, apps, and other digital ecosystems. And effortless, one-click redemption should be table stakes. These “micro-ceremonies,” when rewards are seamlessly issued or spent, are highly impactful, particularly around the holidays when higher volume can translate into higher engagement.
2—Instant delivery on modern rails
Fast reward delivery helps ensure the perceived value of a reward won’t depreciate. Global instant payment systems, such as the EU’s SCT Inst and the UK’s Faster Payments, enable real-time issuance and redemption. Recipients shouldn’t wait days for gift cards to arrive, and delivery should feel instant. Because it can be.
3—Clear attribution and smart gamification
Each digital receipt should clearly connect rewards with the company issuing them and the actions that earned them. These confirmations build trust and open opportunities to layer in non-intrusive, ongoing nudges toward future behavior. “You’re one purchase away from your next reward!” is a message likely to be perceived as meaningful instead of noise.
4—AI-driven personalization and security
Using device-level insights, AI can personalize every payout and localize delivery across different currencies, languages, and channels. AI models are also assessing real-time behavior, spotting and stopping fraud in its tracks.
These are not futuristic fantasies. They’re achievable shifts that transform gift cards from static mechanisms into living, dynamic tools driving brand connection.
Magic moments need to be reimagined
A modern, magical gift card experience shouldn’t feel burdensome or invisible. It should be smooth and noticeable, fitting into daily life while still delivering a spark of joy that turns a brief branded moment into a memory.
Delivered properly, rewards should make you feel recognized, seen, and appreciated—driving connection and loyalty to deliver long-term business value.
It’s time to marry the magic of the holiday season with gift card experiences by making rewards modern, memorable, and unmistakably meaningful.
Tyron (Ty) Bennion serves as the Chief Revenue Officer at Runa, where he leads the company’s global revenue strategy and growth initiatives. With over two decades of expertise in fintech and digital payments, Ty drives the development and delivery of innovative digital value infrastructure that enables businesses to seamlessly integrate digital assets into their operations. A recognized industry expert fluent in English and Spanish, Ty frequently shares his insights on emerging payment markets and the evolution of digital value transfer.
Photo courtesy Imkara Visual for Unsplash+
