Account Takeover (ATO): A form of identity theft where a fraudster illegally obtains access to a victim's bank, e-commerce site, rewards/loyalty points, or other types of accounts.
 

Accrual rate: The rate at which members of a loyalty program accrue benefits.
 

Affiliate program: A strategy where a brand utilizes customers to share information about the brand and data is connected with the affiliate. The affiliate is often rewarded via points or a percentage of sales.
 

Applicant Program Interface (API): A set of functions and procedures allowing the creation of applications that communicate with an operating system. Often utilized for digital gift cards and certain implementations.
 

At Home Activation (AHA): A gift card sales and marketing tool used to provide customers with inactive gift cards and allow them to activate a gift card themselves without needing to purchase the card at a store.
 

Attrition rate or churn rate: The percentage of customers who are no longer participants of a program after a year.
 

Appreciation gifts or surprise and delights: Rewards sent to customers outside of the normal earning scheme which are often unexpected.
 

Award: An item or service claimed through redemption of points or other program currency.
 

Aspirational award: High-value rewards that can trigger a significant behavior change to allow the customer to reach the award.
 

Automatic award redemption: When a loyalty account balance reaches a specific threshold and a reward is automatically generated.
 

Award tier: The grouping of possible awards into certain tiers.
 

Balance: The amount of funds remaining on a gift card.
 

Balance checker: A tool to check the balance of a gift card which can be done via IVR or online.
 

B2B: When talked about in branded currency, it is often used to discuss distribution programs a retailer can engage with.
 

B2C (Business to consumer): Selling goods, services, or gift cards directly to a consumer. Most gift cards are sold via B2C channels.
 

Bank Identification Number (BIN): The first 4-6 digits in a prepaid card or credit card that identifies the issuing institution (e.g., bank,  retailer, or any company that issues cards).
 

BOGO or B1G1 (Buy One Get One free or at a discount): Can be used as a promotional offer or award.

Bonus points: Points offered above the loyalty program structure.
 

Branded Currency: Anything with brand-specific stored value. Including but not limited to gift cards, prepaid products, loyalty points, coupons, promotional codes, and merchandise credits. Often one of the most under-utilized tools available to retailers.
 

Breach: When security measures are broken and a malicious entity is able to acquire personal and financial information.
 

Breakage: Unclaimed value. It can be program points or value left on a gift card.
 

Bucketing: The idea that consumers aren’t spending “their money” but rather getting something with “free money.”
 

Cashback: A type of incentive merchants offer to customers who buy certain products or at certain times and receive a cash refund after the purchase.
 

The CARD Act: The Credit Card Accountability Responsibility and Disclosure Act passed in 2009 ushered in significant changes to gift card fees and expiration terms.
 

Carrier: A form of gift card packaging that holds a gift card or prepaid card such as an envelope or sleeve.
 

Cannibalization: When something triggers customer behavior the customer would have engaged with anyway.
 

Closed economy: When program points and rewards are exclusive to the brand.
 

Closed-loop gift card: Specific to a retailer and not transferable.
 

Cross-sell: A strategy to encourage customers to purchase products from different departments or categories. Often triggered by the purchase of a specific product.
 

Code freeze: A time when processors are not facilitating implementations such as new merchant onboarding.
 

Contextual Commerce: A strategy where merchants seek to implement purchasing opportunities into everyday activities and natural environments.
 

CR-80: The ISO standard size for credit, debit, and gift cards. CR-80 cards are  2 ⅛” inches tall, 3 ⅜” long, and 30 mil. thick.
 

CRT: Cash register tape coupons that print in store.
 

Customer Retention Program: Programs designed to help companies retain as many customers as possible. Loyalty programs are tools utilized as part of a Customer Retention Strategy to reduce the number of customer defections.
 

Deferred revenue liability: When a retailer sells a gift card to a customer, the payment for a future purchase is received upfront, but transfer of merchandise is delayed at the consumer’s discretion. So, instead of recognizing actual revenue on the sale of gift cards, retailers record a deferred revenue liability on the balance sheet for the cash exchange until the gift card is redeemed.

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Digital Gift Card: A digital code from a retailer with store valued either sent via email, text message, or another means of digital communication. Digital gift cards have the same rules and regulations as physical gift cards.
 

Digital Gifting: The ability for consumers to digitally send a product or stored value as a gift. This can include digital gift cards or digital codes for specific products.
 

Direct marketing: Any advertising activity that capitalizes on the direct relationship between a brand and consumer. Often used with a specific targeting strategy.
 

Denomination: The face value of a gift card.
 

DTC or D2C: Direct to consumer. Selling a product directly to the end customer without utilizing wholesalers or third-party retailers.
 

Effective funding rate: The rate at which customers earn rewards in a loyalty program. This is often calculated by dividing the price paid for an award by the amount of money the member had to spend to access the reward.
 

eGift Card: See digital gift card.
 

EMV: Originally stood for Europay, Mastercard and Visa, is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.
 

Enrollment: When a customer opts-in to join a loyalty program.
 

Escheatment: After a certain period of inactivity, states can claim the remaining funds left on a gift card as abandoned. Each state has different regulations and they change frequently. The state the funds are escheated to depends on either the issuing entity’s state of incorporation or the state the customer lives in, if known.
 

Event-driven loyalty programs: Offers and communications based on key events such as birthdays, anniversaries or lapse in return.
 

Expiration: When program awards or offers become void. Gift cards issued through the purchasing process cannot expire. Promotional value cards that are issued as an award can expire.
  

False positive: The occurrence when a legitimate customer is identified as a potentially fraudulent purchase and not authorized to continue the transaction.
 

Financial Crimes Enforcement Network (FinCEN): A government bureau that collects and analyzes information about financial transactions and combats domestic and international money laundering, terrorist financing, and other financial crimes.
 

Form factor: The mode of stored value delivery and redemption. Examples of form factor include physical cards, alpha-numerical digital codes, and scannable barcodes.
 

Four-color process: Full-color printing utilizing four-color separation. This process can produce the widest color range utilizing the fewest number of ink colors. 
 

Free standing insert (FSI): Used in newspapers and magazines; often found in the Sunday paper.
 

Fulfillment: How a gift card is delivered to the recipient. There are multiple types of fulfillment depending on the channel and card type (e.g., fulfillment of a single physical card purchased online compared to fulfilling a bulk order of digital gift cards placed online).
 

Funding rate: The rate at which consumers earn points and rewards in a loyalty program.
 

Gateway: A front-end technology used by merchants to securely authorize/ accept debit or credit card purchases from customers.
 

Gateway Identification Number (GID): An identification utilized for online credit card processing, often included when referencing a Merchant Identification Number. 
 

Gift Card: A prepaid card (physical or digital) that contains a specific amount of money available for purchases. Can be specific to a certain retailer (closed-loop) or open to unrelated retailer (open-loop).

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Gift card mall: A physical or digital location where a consumer can purchase gift cards from a wide range of brands. 
 

Gift card PIN: A security code, ideally covered with a scratch-off layer, to be used at the time of gift card redemption.
 

Hard benefit: A physical reward that can be earned entirely through specified out-of-pocket dollar spend. Also known as payout rate (e.g., spend $50 and receive a $5 promotional card).
 

Hard point: Points contingent on a purchase, often a form of bonus point: (e.g., 25% bonus points when a customer purchases a specific brand or product). 
 

Host company: The company offering the loyalty program.
 

Internal control: A procedure or system designed to promote efficiency and safeguard assets such as sensitive data to avoid fraud.
 

Invisible points: Points that consumers are unaware of, often used for back-end scoring based on purchase behavior or profit margin of purchase.
 

International Organization for Standardization (ISO): The organization that oversees the development and maintenance of worldwide proprietary, industrial, and commercial standards.
 

Interactive voice response (IVR): An automated customer call-in system that offers callers menus and options to address common questions and resolutions. IVR utilizes pre-recorded messages and accepts input from callers via touch-tone keypad and voice response. 
 

Interchange: Transaction fees a merchant must pay when a customer uses a credit or debit card. 
 

Lift or incremental spend: How much a customer spends above the average order value for non-gift card purchases.
 

Overspend: The amount a consumer spends above the value of a gift card. 
 

Liability: Legal or financial debts. When a gift card is purchased, it is recorded as a liability because that value is owed to a customer.
 

Load: Adding funds to a gift either at activation or after use.
 

Loyalty strategy: A system developed by a merchant to foster consumer loyalty through a mix of messaging and marketing. It can include a formal loyalty program but does not have to. 
 

Loyalty points: a type of value customers can earn through shopping and utilizing a loyalty program. Often, loyalty points can be exchanged at certain thresholds for products, services, or discounts. 
 

Mag stripe: A stripe of magnetic material that stores information to be read by a device that can detect variations on the strip. 
 

Manufacturer or Printer: A vendor that produces physical gift cards.
 

Merchant: Any brand, retailer, or service provider that sells products, goods, or services and accepts payment via credit and debit cards. 
 

Merchandise return credit: A type of branded currency given to a customer due to a product return. Merchandise return credits are often offered if a consumer has a return outside of the specified return window or if they do not have a receipt. May have greater restrictions (e.g. only in-store use, expiration dates, etc.).

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Merchant of record: The organization that holds the liability of gift cards sold. Often a gift card processor will be the merchant of record until a card is redeemed.
 

Merchant Identification Number (MID): A unique code provided to merchants by their payment processor. Often used in conjunction with a Terminal Identification Number and/or GID to identify where the transaction occurred. 
 

MID Cross: The process of allowing gift cards to be sold at other retail locations.
 

Near Field Communication (NFC): Sometimes referred to as contactless, is a method of wireless data transfer that detects and then enables technology in close proximity to communicate without the need for an internet connection, often used in payments.
 

On-demand awards redemption: Customers determine the time they request to redeem a loyalty award.
 

On-product coupons or peelies: A type of coupon that can be peeled off a product’s packaging and used on that item.
 

Open economy: When a customer is able to earn and redeem points from multiple brands.
 

Open-loop gift card: A gift card that carries a major credit card logo such as Visa or American Express and can be used wherever those credit cards are accepted.
 

Perceived value: How a customer views the value of a reward. Some rewards may have higher perceived value than monetary value. 
 

Point caps: The maximum amount of points or promotional value a customer can accrue. 
 

Point of sale (POS): A hardware system that captures transactions at the time of sale.
 

Payment processor: A (usually) third party company selected by a merchant to handle transactions from payments such as credit cards, debit cards, and gift cards. A processor may offer their own POS but they are not always paired. 
 

Phishing: A practice where fraudsters appear to be legitimate organizations or individuals in order to gain the trust of their target and gain access to personal or financial information.
 

Personally Identifiable Information (PII): Any information about an individual maintained by an agency, including (1) any information that can be used to distinguish or trace an individual's identity, such as name, social security number, date and place of birth, mother's maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.
 

Prepaid card: A card with stored funds that is not linked to a bank account. This can include open and closed-loop gift cards as well as subscription cards for services such as cell phone service or digital games.
 

Print on Demand (POD): A system or process whereby individual copies or small numbers of gift cards or carriers are printed to order.

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Promotional credit or value: A marketing tool utilized by merchants that acts as a form of discount. Promotional value can be distributed via physical cards or digital codes. Promotional value can expire and require specific contingencies are met for use. 
 

Program manager: An individual who manages a gift card or loyalty program.
 

Radio Frequency Identification (RFID): An increasingly common technology used in payments to create contactless payment systems. Mobile devices such as cell phones and smartwatches can use RFID technology to make secure payments to merchants with RFID capable hardware. 
 

Rails: Digital infrastructure that is compliant with banking regulations and facilitates the transfer of money from one individual or business to another.
 

Redemption: The act of a consumer transferring funds or value from a gift card or other platform in exchange for a merchant’s products or services.
 

Reloadable: A gift card capability that allows consumers to add additional funds to an already active card even. 
 

Restricted Authorization Network (RAN): Prepaid cards that can be redeemed at a restricted number of companies. This is a hybrid of a closed-loop and open-loop gift card. 
 

Rewards earning ratio: The number of actions or amount of times it takes for a customer to earn an award.
 

Sales channel: Key distribution categories where a merchant can sell their gift card or products. The most common gift card sales channels include in-store, online, third-party, and B2B. 
 

Segment mobility: The ability to move customers from one performance category to another, often more profitable, category.
 

Scrip: A popular gift card distribution channel associated with B2B and bulk ordering programs and most often used for school fundraising. The organization receives gift cards at a discount and purchasers pay face value, providing the school or charity organization with additional funds.
 

Share-of-customer: The amount of a customer’s total expenditure in a product or service category.
 

Share-of-market: The percent a business one company has in relation to the total business available for all category competitors.
 

Shipper: A type of temporary display often used in third-part gift card sales. 
 

Self-use: A growing trend where customers buy a gift card with the intention of using it for themselves. Often seen as a way to budget. 
 

Skimming: A method of fraud where the data on a gift card’s magnetic strip is copied to another card or stored on a database.
 

Stored Value: Value held directly on either a card, app, or mobile wallet that is not connected to a bank account.
 

Substrate: The material a physical gift card is made of; common options include PVC and engineered paper.
 

Stacking: Using a store-issued coupon with a manufacturer coupon (most stores allow this).
 

Terms and Conditions (T&Cs): The rules and regulations printed on the back of a physical gift card and/or included in digital gift card communications. T&Cs must be in compliance with current laws.
 

Terminal Identification Number (TID): The number connected to the specific terminal where a transaction is run, often communicated as part of a MID. 
 

Third-party: A sales channel where gift cards can be purchased from other stores. See also: gift card mall. 

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Tier mobility: A consumer’s capability to move between tier levels.
 

Value-at-risk customers: High-value, high-yield customers with a high likelihood to churn. Many programs and program managers give extra weight to value-at-risk customers when developing program strategy.
 

Victim Assisted Fraud: When a person is deceived into giving their own money or financial access to a fraudster.