Choose The Right Type of Gift Card For Reward & Payout Programs

🔎 Types of cards covered in this article:
 
💳 Digital gift cards (eGifts) & physical cards: digital cards deliver immediately at minimal cost, while physical cards offer tangible appeal

💳 Open-Loop & closed-loop: open‑loop cards work anywhere a network is accepted; closed‑loop cards focus spending at one brand

💳 Full choice & single brand gift cards: use full-choice cards to give broad selection, while single-brand cards reinforce specific goals

💳 Expiring & non-expiring: different options to allow for timeless flexibility or to drive fast action

Though they may look straightforward, the types of gift cards on the market today are surprisingly varied.

From physical and digital cards to open-loop and closed-loop options, each type offers its own benefits and audience fit. They can be customized, combined, and distributed in all sorts of ways to match your unique business goals.

Choosing the right option can certainly feel overwhelming. Narrowing down what works best for you often depends on cost, convenience, and the preferences of the people you’re rewarding. In this article, we’ll help you do just that, so you can use the right type of gift cards to take your reward program to the next level.

The types of gift cards available for businesses

Gift cards have become a go-to solution for many reward and payout programs, but there’s no one-size-fits-all approach. With so many types available, it's easy to get lost in the weeds.

The following are the main distinctions between all these options—along with tips to choose the right type for your business needs.

→ Jump to the gift card brands that are most popular with recipients

Physical gift cards vs. digital gift cards

At the most basic level, gift cards fall into one of two categories: physical or digital. In most cases, you’ll choose between them based on the experience you want to offer, along with the logistics you’re willing (and able) to handle.

Some people still enjoy physical gift cards, and they can be the right choice for certain programs and audiences.

But it costs between $.65 and $1.25 just to manufacture, encode, and ship a plastic gift card. So if you work with a gift card distributor, they'll simply have to charge more for physical options than digital.

Further complicating things, processing and shipping physical cards can take several days or even weeks.

And of course, there’s always the risk that they get lost in the mail.

For these reasons, gift card programs that rely on physical gift cards and gift certificates often need to use higher reward amounts to keep engagement high. A recipient’s not going to be that excited to just wait around for a $5 reward.

In contrast, using digital rewards (i.e., e-gift cards) provides several key benefits:

Immediate delivery
Unconstrained reward amounts (i.e., feel free to send low denomination gift cards, even those worth just a penny!)
Ability to automate and scale programs

Ultimately, a successful reward or incentive program comes down to engagement and behavior change. Companies generally use them to meet a business goal, like improved employee engagement or sales enablement.

And most of the time, electronic gift cards are simply the best way to reach those goals.

That said, your audience may simply prefer or require physical gift cards. For example, if your audience isn't online very much, they might not want something that needs to be redeemed online.

Remember, too, that physical gift cards can often be used online, while digital gift cards can often be used in brick-and-mortar locations (i.e., this distinction is primarily about gift card distribution itself).

For example, an Apple gift card from Giftbit gives the recipient to option to spend their reward in Apple Store, apple.com, in the Apple Store app, the App Store, iTunes, Apple Music, Apple TV+, Apple News+, Apple Books, Apple Arcade, iCloud+, Fitness+, Apple One, and other Apple properties (phew).

Open-loop vs. closed-loop (i.e., prepaid cards vs gift cards)

Spending flexibility is another way to break down the types of gift cards available for business programs. Again, your choice will come down to your goals and audience preferences.

Open-loop cards are prepaid cards backed by major networks like Visa®, Mastercard®, and American Express®. They are preloaded with a set balance that can be used anywhere these networks are accepted, both in-store and online. Some, like the Giftbit Virtual Prepaid Mastercard, can even be used internationally.

Critical note: Open-loop cards are formally referred to as prepaid cards. For example, Giftbit offers prepaid cards from Visa and Mastercard. These are NOT gift cards, even though they’re often informally referred to that way.

Benefits of open-loop prepaid cards include:

Flexibility: Recipients can spend funds at a wide range of global merchants.
Broad appeal: Suitable for diverse recipient preferences.
Ideal for: Global rewards programs, large-scale incentives, and programs emphasizing recipient choice.

Meanwhile, closed loop gift cards are brand-specific, one-time load cards designated for specific retailers or brands, like Starbucks or Amazon. As such, they’re only redeemable at the issuing merchant’s locations, whether that’s online or in store.

Benefits of closed-loop gift cards include:

Targeted Rewards: Send recipients to specific retailers to align with your program's objectives (for example, if you want your team to treat themselves to a cup of coffee before your next meeting, you might send them a Starbucks gift card).
Partnership opportunities and brand alignment: Enhance collaborations with specific retailers.
Ideal for: Brand-specific promotions, employee rewards, and customer loyalty programs.

Summing up, choosing the right type of card here depends on your program goals and recipient preferences.

Open-loop prepaid cards work best when flexibility and broad acceptance are your main priorities. Closed-loop gift cards are often a better fit for targeted rewards and  brand alignment.

Ideally, your gift card provider will let you mix and match both options. That way, you can cater to everyone on your rewards list, while continually adjusting your program based on what works best.

Custom gift cards vs full choice gift cards

If you're new to gift card programs, then you may not appreciate that there’s a third critical way to differentiate the types of cards you send.

Namely, you can choose to give your recipients a gift card to one specific brand (or a curated list of specific brands).

Or, assuming you are using e-gift cards, your gift card company might give you the opportunity to send gift cards that offer complete choice of a full rewards catalog.

For example, Giftbit clients have the option to send ‘full choice’ gift cards, so that their recipients can choose for themselves from among the nearly 1000 international gift card options in our global catalog.

Again, deciding how much choice to offer your incentive recipients depends on your program goals and audience preferences.

Custom selections focus on curated options, making it easy to align rewards with specific events or themes. They’re ideal for:

Targeted programs: Offer food delivery cards (e.g., Uber Eats, DoorDash) for webinars or convenience brands (e.g., Starbucks, Dunkin’) for quick treats. Jump to more ideas for pairing brand-specific gift cards with the right situation or campaign.
Employee rewards: Essentials like grocery gift cards or gas gift cards often resonate well.
Themed rewards: Support wellness, mental health, or professional development initiatives with relevant, curated options.

Meanwhile, a full choice gift card provides recipients with access to a broad range of brands, giving them ultimate flexibility. It works well for:

Maximizing engagement: Empower recipients to pick what they truly want, boosting satisfaction and loyalty.
Scalable programs: Suitable for growing, diverse, and international audiences with varying preferences.
Continuous Updates: Ensure rewards stay relevant with a constantly refreshed catalog

Pro-tip: Find a gift card platform that lets you mix and match both approaches.

My favorite thing is giving people a reward that you know they want.

By offering them the choice, it’s not so prescriptive. We’re able to honor and appreciate them, while also allowing them to have some voice and choice in what they receive.

— Molly Quinn, Managing Director of Marketing & Communications | Distinctive Schools

See how rewards work for Molly

Global roundup: the most popular gift card options

Retail gift cards, restaurant gift cards, entertainment gift cards, online shopping, travel gift cards, gas and grocery gift cards, beauty and spa gift cards, sports gift cards ... the amount of options you have for gift card programs can feel overwhelming.

So how do you choose?

Many program managers simply want to send the most popular gift cards— fool-proof brands and retailers with built-in, near universal appeal

To help you figure out what those might be, we've analyzed Giftbit data from 2024 to determine which brands are most popular among our clients and their recipients. As you might have guessed, Amazon.com gift cards and Walmart gift cards are always popular—but so are many other options.

Unless noted, the following data shows the brands that recipients have chosen for themselves most often, when given full choice rewards.

In other words, when recipients get to choose which gift card to select from a global catalog with hundreds of brands, these are what they go for.

If you're still not sure what type of gift card is best for your business, we always recommend a quick chat with incentive specialist Matt Brossard. As the Director of Business Development here at Giftbit, he's helped hundreds of CEOs, marketers, HR professionals, and program managers to figure out exactly what works best for their bespoke needs.

Please note: We do not include Visa and Mastercard prepaid cards in the following lists, even though they are popular options in virtually every country that sends them. Remember, prepaid cards are not gift cards, and the following data focuses on gift cards only.

Most popular gift cards for US recipients 🇺🇸

The most claimed gift cards among Giftbit recipients based in the US include:

Amazon.com
Walmart
Starbucks
Apple
Target
Domino's
Dunkin'
DoorDash
Papa John's
Chipotle
Uber Eats
The Home Depot
Lowe's
Blaze Pizza
Grubhub
Uber
California Pizza Kitchen
eBay
Google Play
Airbnb

Other notable mentions include Macy's, Hulu, Hotels.com, Krispy Kreme, Best Buy, Panera Bread, Chili's, Applebees, Baskin Robbins, Taco Bell, CVS Pharmacy, Panda Express, Barnes and Noble, Burger King, AMC Theatres, Albertsons, SONIC, Sephora, The Cheesecake Factory, Nike, Bass Pro Shops, Kroger, Lyft, Cold Stone Creamery, GameStop, Southwest Airlines, Delta Air Lines, and Marriott.

Most popular Canadian gift cards 🇨🇦

The most claimed gift cards among Giftbit recipients based in Canada include:

Amazon.ca
Walmart
Starbucks
Esso and Mobil
Apple
Indigo
Uber Eats
Winners
Cineplex
The Home Depot
Uber
DoorDash
Ultimate Dining Card
Sobeys
SkipTheDishes
Montana's BBQ & Bar
Marshalls
Old Navy
Earls
Bath & Body Works
Tim Hortons
Home Hardware

Other notable mentions include Subway®, Hudson's Bay, Gap Canada, RW & Co, HomeSense, Harvey's, Airbnb, Air Canada, Wayfair, Swiss Chalet, Davids Tea, FreshCo, East Side Mario's, Penningtons, Xbox, PlayStation Store, Ardene, Petro-Canada, and Kelsey's.