U.S. merchants are levelling up their digital gift card programmes, but a new report reveals they’re still falling short on AI innovation and social media strategy.
Blackhawk Network (BHN), in partnership with NAPCO Research, has released its 8th annual Digital Gift Card Evaluation Report, analysing 100 merchants across 17 verticals. The study evaluated the complete digital gift card experience based on 126 unique criteria, including purchasing, delivery, and recipient experience.
“Digital gift cards are a rapidly expanding segment, representing nearly 43% of the total U.S. gift card market. Merchants are actively responding to that growth and overall consumer demand by investing in innovative, digital-first solutions that simplify the customer experience. Improvements in mobile delivery, personalisation through AI, and increased payment flexibility reflect the industry’s commitment to meeting consumers exactly where and how they prefer to shop,” said Jay Jaffin, chief marketing officer at BHN.
Mobile reigns supreme
This year’s findings show strong progress in mobile capabilities. Mobile web performance improved 9% year over year, with expanded delivery methods like SMS and direct-link sharing making the process faster and more flexible. Merchants with well-developed mobile apps also stood out, especially those focused on usability and in-app marketing.
However, many continue to miss opportunities to differentiate through AI and social commerce. Only 5% of merchants used AI-driven gift card recommendations despite rising consumer interest in personalisation. Social media performance was particularly weak: merchants averaged just 2% in social marketing and 33% in leveraging gift cards within promotions.
Consumer electronics and office supply retailers led the pack with a 92% average digital score, driven by strong discoverability, flexible gifting options, and alignment with customer preferences.
For the first time, the report focused exclusively on digital experiences, reflecting the continued shift in consumer demand toward fast, mobile-first gifting options. Expanded delivery criteria included SMS and link-based options alongside email.