How does a gift card API work?

Running a rewards or incentives program manually is time-consuming and error-prone. A gift card API automates the entire process, from purchase to delivery, making it easy to send digital rewards at scale.

Here's a look at what makes gift card APIs work and how they're transforming the way businesses distribute rewards.

What is a gift card API?

A gift card API is software that lets your application communicate directly with gift card providers and payment systems. 

It handles all the complex processes involved in generating, delivering, and tracking digital rewards. Think of it as a bridge between your system and the vast network of retailers and payment providers.

Instead of manually purchasing gift cards one by one, you can use an API to programmatically order and send them. This automation is essential for businesses running large-scale reward programs.

How gift card APIs work

Gift card APIs handle several critical functions behind the scenes. When you request a new gift card, the API generates a unique code and validates it against the provider's database. It then manages inventory, tracks redemption status, and provides real-time data on usage.

The API also handles secure payment processing and ensures compliance with financial regulations. When a recipient gets their reward, the API facilitates the communication between your system and the gift card provider's platform.

Security is a core component of gift card APIs. They use encryption to protect sensitive data and implement fraud prevention measures to ensure legitimate transactions.

When to use a gift card API

Companies often wonder if implementing a gift card API is worth the effort. The real experiences of organizations that have made the switch demonstrate clear benefits in time savings, cost reduction, and recipient satisfaction. 

Spot Pet Insurance

Spot Pet Insurance wanted to send $25 Amazon gift cards to all first-time policyholders. Before implementing an API, they spent 13 hours monthly manually processing rewards.

The process involved running reports, downloading data, mapping gift card codes, and uploading everything to an email platform.

"The manual process took us at least 13 hours per month," said Shane Grosskopf, Compliance and Operations Manager at Spot.

After switching to an API solution, they automated the entire process and saved over 150 hours annually. They now send over $1.3 million in rewards annually while maintaining perfect compliance with state-specific regulations.

The API integration also improved the customer experience significantly.

"With Tremendous, they're able to just download the gift card and add it right to their Amazon account without any manual work," Shane explained. "That's cut down all of the complaints we had about incorrect codes."

PowerMarket

PowerMarket offers incentives to new customers for signing up for clean energy services and sends customer appeasements when issues arise.

Before implementing an API, they had to pay a fee for each incentive they sent, and tracking incentives was difficult.

"They were charging fees no matter what, on top of the actual dollar amount we were sending to people," said Leland Gohl, PowerMarket's Director of Marketing and Customer Experience.

After switching, they saved over $8,000 on incentives while delivering a better customer experience.

"We receive positive feedback all the time," said Leland. "It really helps to be able to give them money through PayPal, Venmo, or direct transfers." Since implementing the new system, PowerMarket has seen fewer customer complaints on a percentage basis.

YMCA of San Francisco

The YMCA of San Francisco needed to improve their charitable disbursement process. Prior to 2022, distributing assistance involved driving to different gas stations and grocery stores to buy stacks of gift cards, or filling out and handing community members checks — a tedious, manual process.

"We realized that, organizationally, we needed a more streamlined process to buy and give out gift cards," said Cynthia Pun, District Administrative Director. "Programs had their individual processes. It was hard to keep track of the data." The API solution now allows them to approve orders in bulk and automates W-9 collection within the dashboard.

"Every time that we've handed a physical card to a family or walked a family through the process of activating their gift card digitally, it's been such a sigh of relief," said Karla Diaz, director of community programs & family engagement.

The YMCA reports saving several hours each month since switching to the API solution.

Our API vs. the competition

Most gift card APIs charge fees for each transaction, eating into your reward budget. Some providers offer limited customization options or restrict you to specific brands.

Others offer little in the way of automated reporting support, which turns tracking into a manual chore.

The Tremendous API eliminates these pain points. For starters, we charge no fees on transactions, which could save your company thousands per year. 

We also help you automate compliance tasks like state-specific regulations and W-9 collection, while bulk approval capabilities streamline administrative work.

Plus, our intuitive dashboard simplifies tracking and reporting, letting you monitor all payouts and generate detailed reports from a single interface.

With Tremendous, implementation is straightforward and fast. Clear API documentation lets development teams integrate quickly — often without needing additional engineering support. 

Recipients love Tremendous too — they can choose from over 2,000 reward options across 200+ countries, ensuring locally relevant, ready-to-use rewards wherever they are. 

Whether recipients prefer digital gift cards, physical cards, PayPal, Venmo, or direct transfers, they can choose the payout method that works best for them — all while enjoying a seamless, branded redemption experience.

Key takeaways

Gift card APIs transform manual reward processes into automated workflows. They eliminate hours of administrative work while providing better experiences for recipients. The right API should offer robust customization options, comprehensive tracking capabilities, and transparent pricing.

Integration time matters too. A well-designed API with clear documentation lets your development team implement the solution quickly. This means you can start sending rewards sooner and begin seeing ROI faster.

Remember that not all APIs are created equal. Look for providers that offer the features you need without charging excessive fees.

Consider factors like brand selection, customization options, and ease of use for both your team and reward recipients.

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