In a world of endless choices, gift cards have become a perennial favorite among shoppers seeking thoughtful gifting options. According to NRF’s 2023 November Holiday Consumer Survey, gift cards ranked second among the top five gifting categories, with approximately 44% of respondents planning to purchase them. Total spending on gift cards in the US was expected to reach $29.3 billion, with shoppers intending to buy between three to four gift cards each.
By streamlining the entire gift card management process—from downloading orders to the allocation and fulfillment of physical gift cards, as well as accurately handling digital ones, retailers can deliver a more consistent experience for their customers.
In this blog, we’ll discuss how HotWax Commerce simplifies gift card management for retailers using Shopify POS and NetSuite, ensuring a smooth process for retailers and a better experience for customers in an omnichannel retail environment.
What are Physical And Digital Gift Cards?
-
Physical Gift Cards: Physical gift cards are tangible cards with a preloaded value. Customers can purchase these cards in-store or order them online to get them delivered to their home. Each card comes with a unique serial number that customers can use to redeem its value. Managing online orders of physical gift cards involves processing, activation, and shipping to ensure that customers receive their cards and can redeem them for new purchases on both online and in-store channels..
-
Digital Gift Cards: Digital gift cards, also known as e-gift cards, are virtual counterparts to physical gift cards. Customers receive them via email or text message, along with a unique serial number for redemption. These cards are automatically activated and instantly accessible on both online and in-store channels upon purchase, making them a convenient option for both retailers and customers.
What is the Role of Shopify and NetSuite in Gift Card Management?
Shopify is a leading eCommerce platform that enables retailers to create and manage online stores with ease and Shopify POS is a versatile point-of-sale system designed for Shopify retailers, allowing them to manage in-store sales, inventory, and customer data in one unified solution. Both Shopify and Shopify POS allow retailers to sell and utilize gift cards as a payment method online and in-stores.
NetSuite is an ERP system that serves as a comprehensive business management solution, offering features such as inventory management, financial data integration, and more. It is often utilized as a fulfillment solution in warehouse locations by retailers. Warehouse fulfillment teams initiate activation and fulfillment of gift cards allocated to warehouses from NetSuite.
HotWax Commerce has a ready integration with Shopify, Shopify POS and NetSuite. By leveraging HotWax Commerce, retailers can ensure end-to-end gift card management across all these systems.
Setting Up Gift Cards
Gift cards can be set up in Shopify in two primary ways: stocking pre-loaded gift cards or stocking blank cards for on-demand loading. Each method has its own advantages and challenges, and choosing the right approach depends on the retailer's specific business needs.
1. Stock Pre-Loaded Gift Cards
One common approach among retailers is to pre-assign values to physical gift cards and stock these preloaded cards. In this setup, gift cards are treated as individual products, each with its own SKU corresponding to a specific denomination. For example, if a retailer offers gift cards in $100, $150, $200, and $250 denominations, they would create separate SKUs for each value.
Fig 1: Setup of Pre-loaded Gift Cards
Advantages:
-
Instant Redeemability: Pre-loaded cards are instantly redeemable, eliminating the need for activation at the time of fulfillment.
-
Streamlined Fulfillment: Orders for these gift cards can be processed and shipped immediately, as the cards are already loaded with value.
Drawbacks:
-
Inventory Management Challenges: Managing a fixed inventory of preloaded cards requires maintaining all the denominations in stock.
-
Tied-up Financial Resources: Retailers must allocate funds upfront to load the cards, which creates a financial liability for Shopify retailers until the cards are sold.
2. Stocking Blank Gift Cards for On-Demand Loading
To mitigate the drawbacks of pre-loaded gift cards, HotWax Commerce recommends retailers to stock blank cards that can be loaded with value and activated after an order is received. In this scenario, retailers can create multiple variants of a gift card with different denominations but treat them as a single product with shared inventory and a common SKU.
Fig 2: Setup of Blank Gift Cards
For example, if a customer orders a $200 gift card, the retailer will take a blank card, load the $200 value, and activate it, ensuring that the gift card is ready for immediate use upon receipt by the customer.
Advantages:
-
Simplified Inventory Management: By stocking only blank cards, retailers avoid the complexities of managing separate inventories for each denomination. This method ensures that inventory aligns with customer demand more effectively.
-
Financial Flexibility: Unlike pre-loaded cards, this approach doesn't require tying up financial resources in advance. Retailers load the value onto the card only after a sale is made, reducing financial liability and better aligning cash flow with actual sales.
The only additional step involved here is the activation flow. However, HotWax Commerce handles the activation flow for retailers, ensuring that when customers receive their gift cards, they can instantly redeem them. We will discuss in the next sections how HotWax Commerce manages the activation process.
Once gift cards are set up, HotWax Commerce downloads them from Shopify in the same way as other products, ensuring that the gift card management remains consistent and efficient.
Selling Gift Cards Online
HotWax Commerce downloads gift card orders from Shopify, whether they are physical or digital gift card orders, just like any other orders. HotWax also synchronizes these orders to NetSuite, ensuring accurate record-keeping and streamlined processing.
Fulfillment Of Physical Gift Cards
Physical gift card orders are processed like regular fulfillment processes, and HotWax Commerce routes these orders to locations that carry physical gift cards.
If physical gift cards are stocked at a warehouse and a customer places an order for a physical gift card on Shopify, HotWax Commerce downloads the order from Shopify and synchronizes the order details to NetSuite.
In the event where a gift card order is allocated to a store for fulfillment, it appears in the HotWax Fulfillment App, which is a part of HotWax Commerce’s suite of apps. This app is designed to enable store associates to fulfill orders allocated to stores efficiently.
1. Fulfillment of Gift Cards in Warehouse
When warehouse fulfillment teams use NetSuite for fulfilling physical gift card orders allocated to them, they start the process with assigning a unique serial number to each gift card and loading the corresponding value onto it. This step is critical for ensuring that each gift card is correctly loaded with its intended amount.
Activation of Gift Cards
After the values are assigned, it's essential to sync these details to Shopify. This synchronization is crucial as it activates the gift card, allowing the recipient to redeem it.
Fig 3: Gift Card Activation Flow
HotWax Commerce handles the synchronization of activation details from NetSuite and then syncs these details to Shopify to complete the activation process.
Once the fulfillment of the gift card order is complete, the details are synced from NetSuite to HotWax Commerce. HotWax Commerce further updates Shopify with the fulfillment data and tracking information, keeping customers informed with real-time updates on their orders.
2. Fulfillment of Gift Cards in Store
If gift cards are allocated to a store for fulfillment, they appear in the HotWax Fulfillment App. As a part of the fulfillment process store associates assign a unique serial number to each gift card and load the corresponding value onto it.
Activation of Gift Cards
To activate the gift card in case of store fulfillment, store associates apply the assigned serial number and the value of the gift card directly in Shopify POS.
Once gift card orders are successfully fulfilled in-store, HotWax Commerce synchronizes the order fulfillment data to NetSuite and Shopify, and also sends the tracking details to Shopify.
Fulfillment Of Digital Gift Cards
Digital gift cards are configured for auto-fulfillment directly in Shopify. When a customer orders a digital gift card on Shopify, they instantly receive their digital gift card via email, along with the serial number that can be used to redeem the gift card.
After downloading the digital gift card orders from Shopify, HotWax Commerce also synchronizes them to NetSuite.
Selling Gift Cards In Store
When walk-in customers purchase a physical gift card at a store, it is processed as a regular POS order in HotWax Commerce. Stores keep blank gift cards on hand, and store associates assign a serial number, load the value, and activate the cards on Shopify POS at the time of purchase. HotWax Commerce then synchronizes these orders to NetSuite during the POS sales synchronization process.
Final Step in Gift Card Management: Redeeming Gift Cards
When a customer buys a gift card, an order is created with the gift card item, and its payment is recorded as deferred value in NetSuite since it represents a prepayment for future purchase.
Now, when the customer uses the gift card to buy a new item, the gift card amount will be redeemed against the new order.
Let’s understand this with an example. When a customer purchases a $100 gift card on Shopify, an order is created for the gift card, and the $100 payment is recorded as deferred value in NetSuite as it represents a prepayment for a future purchase. NetSuite tracks this deferred value until the customer redeems the gift card.
Later, the customer buys an item worth $100 and chooses to use the gift card they bought earlier for payment. The customer provides the unique serial number on the gift card to redeem the value stored on it. On using the gift card for payment, the $100 that was recorded as deferred value is redeemed against the total cost of the items purchased and is recorded as actual payment. This process ensures accurate accounting for gift card transactions and allows customers to redeem their gift cards smoothly for their future purchases.
* * *
Why Use HotWax Commerce for Gift Card Management?
Managing gift card orders efficiently is crucial for retailers aiming to provide a smooth customer experience. With the integration of Shopify, NetSuite ERP, and HotWax Commerce, retailers can streamline every aspect of gift card management—from setup and fulfillment to activation and redemption.
HotWax Commerce plays a pivotal role in this ecosystem by ensuring that gift card data accurately flows between Shopify and NetSuite. It facilitates activation, updates fulfillment statuses in real-time, and manages both physical and digital gift card orders effectively. This integration helps retailers optimize their inventory management, enhance financial tracking, and deliver a consistent experience to customers across all touchpoints.
Contact an expert today to see how HotWax Commerce can help you optimize your gift card management strategies.
