How to start a gift card business in India

Operating​‍​‌‍​‍‌​‍​‌‍​‍‌ your own gift card business carries a certain charm with it. The first thing that comes to your mind is a platform or store that not only makes the right selections but also facilitates gifting and offers the convenience of digitalization. You imagine people picking gifts for birthdays, festivals, promotions, and even to appreciate someone in their everyday life. It sounds and feels like a promising venture, and rightly so. However, it is still worthwhile to explore the business aspect before you start envisioning logos and polished products. A gift card business works best when it is based on solid planning, intelligent partnerships, and a well-defined framework.

This article is a business plan that will help you in mapping your journey from the initial idea to daily operations, to assist you in creating a business that is both stable and profitable.

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Understanding How the Gift Card Business Works

A​‍​‌‍​‍‌​‍​‌‍​‍‌ gift card is basically a prepaid card that enables a person to buy products or services up to a set value from a specific store or platform. People in India come across two broad types of cards. With closed-loop cards, the spending can only be done at the brand that issues these cards. These are the ones you come across in fashion stores, restaurants, or online retailers. On the other hand, open-loop cards are accepted at multiple merchants as they are linked to major payment networks. They function more like prepaid cards with more formal rules.

The business behind them is done through three layers. At the top is the issuing brand or merchant, which provides its own card. Then, some aggregators or marketplaces sell cards of various brands and make a margin. Lastly, there are technology partners who deal with code generation, redemption tracking, and security checks. Depending on the entrepreneur's decision on the model, they can enter at different ​‍​‌‍​‍‌​‍​‌‍​‍‌points.

Choosing a business model

First, figure out which model actually fits what you want, how much time you’ve got, and how much you’re willing to put in. Here are some of the best options:

• Gift Card Reseller (Digital or Physical): This one’s pretty simple. You sell gift cards from all kinds of brands. You can start small, do everything online, and build up as you go.
• Multi-Brand Gift Card Marketplace: Picture a mini online store of your own where people browse, pick gift cards, choose the amount, and get their codes right away.
• Corporate Gifting Services: Companies always need gift cards for rewards or holidays. If you cater to them, you’ll see bigger orders and, more importantly, they keep coming back.
• Gift Cards for Your Own Shop or Brand: If you already run a business, adding gift cards is important. They boost loyalty and bring more people through your door.

Whichever way you go, it’s easy to scale your business as the demand grows.

Market research and customer study

Before​‍​‌‍​‍‌​‍​‌‍​‍‌ you step in the business, be sure you understand the market. India’s gifting and prepaid market has expanded rapidly over the last couple of years, mainly because of digital payments, E-Commerce, and hassle-free online gifting. Several trends are influencing consumer choices.

• Understand Industry Trends: For instance, you need to analyze the expansion of both digital and physical gift cards, seasonal peaks, and popular categories such as e-commerce, food, and experiences.
• Identify Target Audience: Figure out who will be the buyers of your cards. Will it be corporate, students, families, young professionals, or tech-savvy millennials?
• Analyze Competitors: Find out how other gift card platforms work, their pricing strategies, and the methods they use to engage customers.
• Understand Preferences: Identify the most popular gift card types, value ranges, and the preferred method of delivery (digital vs physical).
• Identify Customer Complaints: Understand what frustrates customers in the current offerings so that you can provide them with a better experience.
• Spot Opportunities: Find out the gaps in brands, categories, or corporate services that will help you to differentiate your ​‍​‌‍​‍‌​‍​‌‍​‍‌business.

Legal Requirements You Should Know

As​‍​‌‍​‍‌​‍​‌‍​‍‌ gift cards are treated as prepaid payment instruments, some rules need to be followed.

Basic Requirements Include:

• The cards should properly display the expiration dates
• Brand partners must adhere to RBI guidelines
• Digital cards might need user verification
• The redemption instruction should be transparent
• The taxation is based on the kind of voucher

If you partner with established brands or technology providers, they will guide you through most compliance steps. This makes the legal process easier than it appears.

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Setting Up Your Business

• Register Your Company: Decide if you're starting as a sole proprietorship, a partnership, or a private limited company. Pick what fits you best and go for it.
• Choose a Technology Provider: You’ll need a partner to handle digital code generation, delivery, and security. Most providers already have systems ready for new businesses, so you won’t have to build everything from scratch.
• Build Your Online Platform: Keep your website or app clean, simple, and easy to trust. People should be able to find what they want, buy it, and check out without any hassle.
• Organise Your Team: Even if you’re running things solo at first, you’ll likely need help soon for customer service, partnerships, managing orders. Don’t try to do it all alone.

Partnering With Brands and Retailers

Brand partnerships really drive your business. Reach out to brands professionally, lay out your vision, and show them exactly how working with you boosts their sales.

Brands usually want a few things:

• A clear marketing plan
• A platform they can trust
• A smooth experience for their customers
• Transparent reporting
• Professional, straightforward communication

Start with mid-sized and well-known brands. Once you’ve built some momentum, you can branch out and add more partners to your catalogue.

Building Your Platform: Technology and Experience

For your website or app, focus on making the interface simple and clean. Even people who’ve never used your service before should be able to navigate well. The platform should have things like instant code delivery, step-by-step redemption instructions, secure payment gateways, balance tracking, easy filters and search, and nice-looking digital designs for gifting. It’s all about making the whole process smooth and pleasant. When customers find it easy and even enjoyable to use your platform, they’re way more likely to stick around and come back again. That’s how you build real loyalty.

Packaging and Design

Packaging and design really set your gift card business apart. Even with everyone glued to their screens, a card that actually looks good and feels thoughtful is the one that sticks in people’s minds. If you’re selling physical cards, don’t skip this step: choose sturdy materials, eye-catching sleeves, and make sure the instructions are easy to follow. For digital cards, go for a modern look that’s easy to recognise and simple to share over email or messaging. Keep your branding consistent, layouts clean, and attention to detail. These details show customers you care and know what you’re doing. Great packaging and design don’t just impress people; they get people talking and make them want to buy again.

Your Pricing and Earnings

Here’s how you make money:

• You earn a margin on every card sold
• Bulk orders from businesses
• Special seasonal promos
• Service fees for custom designs

Margins shift depending on the brand, time of year, and how big the order is. Corporate gifting usually brings in the biggest profits.

Marketing Your Gift Card Business

You don’t need over-the-top marketing to get noticed. Honestly, a simple, clear website is okay at first. Use social media to show off new cards or deals. Run festive promos, set up a referral program, and team up with local businesses to reach more people. Regular emails keep your regular customers in the loop and coming back for more. When you’re clear, present during big gifting moments, and actually connect with people, you build real trust. So customers keep coming back without you needing to shout or push too hard.

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Operations and Customer Support

Behind it all, operations and support are everything. People expect quick help if something goes wrong. If a code won’t work, the balance is off, or they just need help figuring out how to use the card.

A friendly, fast, and knowledgeable support team can turn a problem into a reason for someone to stick with you. And daily operations matter too: keeping track of card inventory, making sure digital codes get where they’re supposed to, updating balances, tracking orders, and staying in sync with your brand partners. When you nail both service and operations, people notice and come back.

Investment Required

• Technology Platform: Put money into a secure system that handles code generation, delivery, and balance tracking. You want it to be reliable from day one.
• Website and App Development: Focus on building an interface that’s easy to use. People should be able to browse, buy, and redeem cards without any hassle.
• Marketing and Promotion: Set aside a budget for digital ads, social media, festive deals, and email campaigns. These bring in those first customers.
• Inventory Management: If you’re dealing with physical cards, keep them stored safely. Good packaging and tracking help you avoid losses and delays.
• Team Salaries and Training: Bring on skilled people for operations, support, and partnerships. Make sure they get solid training so your service stays top-notch.

All these steps set you up to grow and keep things running smoothly right from the beginning.

The Future of the Gift Card Market in India

• Rising Digital Adoption: Digital gift cards are becoming more popular. More people want instant options right from their apps or favorite shopping sites.
• Corporate Gifting Growth: Companies now use gift cards for everything from rewards, incentives, to festive bonuses. It’s a big shift.
• Integration with Loyalty Programs: Gift cards are also getting bundled with subscriptions and loyalty programs, so customers feel like they’re getting even more value.
• Instant Delivery via QR Codes: That’s becoming the new normal. People expect quick, seamless redemption.
• Personalization: People want their cards to be customized. Especially the younger buyers. Cards with custom messages, cool designs, or unique experiences stand out.
• Sustainability Focus: Eco-friendly packaging and digital-only cards are catching on, too. Sustainability isn’t just a buzzword anymore, it’s a selling point.
• Growth in Smaller Cities: Tier-2 and tier-3 markets are wide open and ready for new options.

Starting a gift card business isn’t just about tech or logistics. It’s about joining a growing culture that helps people give better, more thoughtful gifts. If you’re looking for a business that mixes creativity, technology, and steady demand, this is it. Start small, stick with it, build real partnerships, and grow step by step. With a good plan and the drive to keep getting better, your gift card business can go further than you think.

And when doubts creep in, just remember why you started. You’re making gifting easier for a lot of people, and honestly, that’s something to be proud of.

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