Sending rewards at scale with gift card distributors

Rolling up to your nearest big box store to purchase gift cards works fine when you're sending a few rewards every year. But the more gift cards you send, the harder it becomes to stay efficient — and secure.

Most companies hit a breaking point with gift card management when their programs start to scale. Whether you’re sending thousands of dollars in rewards a year or managing rewards across multiple departments, purchasing, sending, and tracking gift cards can take a toll on your team.

Global programs add even more challenges to reward management. Each region needs locally-relevant gift card options. Currency conversion and translation can complicate delivery. And gift card tax rules vary from country to country.

A gift card distributor transforms manual work into automated processes. The right platform can handle everything from purchasing to delivery while providing the flexibility to support any use case.

Here's a look at what gift card distributors do, when your organization may need one, and how to choose the right platform for your business.

Key takeaways

• Automation: The right distributor automates gift card procurement, delivery, and tracking so your team can stop wrangling spreadsheets.

• Global reach: Look for a platform that supports multiple countries with local currency conversions and region-specific gift card options.

• Security and compliance: Choose a platform that offers fraud prevention tools, collects tax forms, and implements leading security protocols.

• Pricing: Look for platforms with no per-send fees, no minimums, and no add-on costs.

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What is a gift card distributor?

A gift card distributor manages the end-to-end process of purchasing, sending, and tracking digital and physical gift cards at scale. These platforms handle everything from procurement to delivery, making it possible for businesses to send hundreds or thousands of gift cards efficiently.

Gift card distributors serve as the connection point between retailers that offer gift cards and businesses that need to send them. They maintain direct relationships with merchants, negotiate bulk pricing, and provide a technical infrastructure for automated distribution.

When do you need a gift card distributor?

Your business needs a gift card distributor when manual distribution starts to slow down your team. This typically happens when you're sending multiple batches of gift cards per month, managing rewards across multiple programs, or spending thousands of dollars per year on incentives.

Gift card distributors can support many different kinds of rewards and incentive programs. For example, if your marketing team runs an incentive program that offers gift cards across multiple campaigns and regions, a centralized platform can help you reduce administrative work and stay compliant. 

If your HR department wastes hours reconciling employee recognition rewards in scattered spreadsheets, a gift card platform can lighten the load. 

Consider Atlassian's Kudos employee recognition program. The global software leader needed a way to consistently deliver rewards to employees across global teams. The program is one of many perks that helped Atlassian secure a spot on Fortune's list of 100 Best Companies to Work For, with rewards as small as $25 driving meaningful impact.

“The Kudos program lets us thank each other for our hard work. It’s a huge part of our culture here.”

Research teams also face unique challenges with sending participant incentives. They need to verify participants, prevent duplicate rewards, and maintain detailed records for compliance purposes. With the right gift card distributor, researchers have the last-mile solution they need to process everything efficiently and focus on what really matters: gathering actionable feedback for clients.   

Manual processes posed challenges for The City University of New York (CUNY) Institute for Implementation Science. The university was sending millions in research incentives using Amazon gift codes with no way to track or prevent fraud. By moving to a gift card distributor with AI-powered fraud prevention built in, CUNY saved $40,000 in just a few months.

Benefits of using a gift card distribution platform

A gift card distribution platform transforms manual sending into automated workflows. The right platform saves time while adding security and control. Some of the benefits of using a gift card distributor include:

• Scalability: Send rewards to 10 recipients or 10,000 without adding complexity. A robust platform handles bulk uploads through simple CSV files and automates sending through API connections.

• Tax compliance: Avoid headaches and compliance risks with automated W-9 tracking. The right platform will track reward totals and send W-9 forms to recipients who need them.

• Recipient choice: Give recipients options beyond standard retail gift cards. The best platforms can also offer prepaid cards, direct deposits, and even charitable donations to ensure that every recipient receives the perfect reward every time.

• Fraud prevention: Protect your organization’s reward budget from increasingly sophisticated fraudster attacks. The right platform stops fraud before it happens with multi-layer security that blocks scammers based on country, IP address, and receiving threshold.

• Global reach: Send rewards to recipients worldwide. Many gift card distributors handle currency conversions and provide locally-relevant options in multiple countries.

• Cost savings: Purchasing gift cards directly usually means you pay full price. But a gift card distributor can negotiate volume discounts that help your reward budget go further. 

One thing to watch out for: Some platforms charge a fee for every card sent, so make sure to ask about service fees and hidden costs up front.

How to choose a gift card distribution company

Not all gift card distribution companies work the same way. Some are built around self-serve dashboards, others are API-first platforms designed for developers, and some operate as full-service enterprise networks with dedicated account management. Here's what to look for:

• Catalog breadth and recipient choice: How many merchants does the platform support? Can recipients choose their own reward, or are you limited to pre-selected options?

• Global coverage: Does the platform support local currency conversions, translations, and region-specific options? How many countries can they deliver to?

• Integration options: Look for native integrations with CRMs, HRIS platforms, and survey tools, plus a well-documented API. If your team isn't technical, make sure the platform also offers a straightforward dashboard entry and CSV uploads

• Security and fraud prevention. Ask about velocity limits, IP and geofence restrictions, recipient verification, and audit logs. This is especially important for research incentives and high-volume consumer promotions.

• Tax compliance support. In the U.S., gift cards are generally taxable under IRS rules. Your platform should handle W-9 collection, track cumulative reward totals, and generate 1099 forms automatically.

Tremendous checks all the boxes. Offer 2,500+ reward options in 230+ countries and regions with powerful integrations, AI-powered fraud prevention, and automated W-9 collection. And the platform is free to use.

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Gift card distributor pricing models (and what to watch for)

Pricing is one of the biggest differentiators between gift card distribution companies. It’s also one of the easiest places for hidden costs to creep in.

• Per-send fees: Some platforms charge per transaction. At scale, these fees add up fast. 

• Platform or subscription fees: A monthly or annual fee for platform access, regardless of volume. 

• Spread-based pricing: Some platforms profit on the difference between what they pay merchants and what they charge you. 

• No-fee models: Platforms like Tremendous don't charge any platform or sending fees, so you only pay for what you spend.

When you’re evaluating pricing for a potential platform, ask the vendor:

• Do you charge above face value for any gift cards?

• Are there per-send or per-transaction fees?

• Is there a minimum annual spend or commitment?

• Are there separate fees for API access, reporting, or integrations?

• How does pricing change as our volume grows?

Can you buy gift cards wholesale?

Many individual merchants offer wholesale gift card options, but going direct comes with limitations. Not all recipients want the same rewards, so buying from just a few vendors limits your options. And since each merchant sets its own order minimums, your organization may not qualify for all of them.

While merchants may make it look easy to buy in bulk, they don't help you cancel lost codes, generate reports, or manage compliance paperwork.

A gift card distributor can handle all the admin details for you while giving your recipients the gift of choice.

Difference between gift card distributors and gift card resellers

Gift card distributors and gift card resellers may sound similar, but they operate very differently. Here's how they compare:

In short, it's all about reliability. A reputable gift card distributor provides a seamless experience for your teams and your recipients.

Key takeaways

Gift card distributors become essential when manual distribution creates operational bottlenecks. They save time, reduce errors, and provide robust tracking and reporting capabilities to help your team keep tabs on what you’ve spent, sent, and redeemed.

A great gift card platform should offer:

• Scalable automation that enables easy bulk purchasing and sending

• Built-in security and tax compliance features

• Global reach with instant delivery and local currency conversion

• Real-time tracking and reporting from a single dashboard

• Integration options that connect with your existing systems

• Transparent pricing with no hidden fees or minimums

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