PhotoConsumers obviously like to give and receive gift cards. It allows the recipient to get what he or she wants and isn't nearly as tacky as cash.

In fact, giving a gift card from a particular retailer allows the giver to personalize it a bit, choosing a retailer the recipient happens to like.

But beyond personal preferences of retailers, which retailer does the best job with its gift card program? That's a question RSR Research asks each year in its annual study of best gift card practices.

The survey ranks the digital gifting experiences of 100 of the nation’s top retailers, restaurants, and – for the first time this year – airlines. The retailers are judged on how well they utilize the mobile platform, and include omni-channel payments, bulk buying, and the ability to purchase cards with credit card loyalty program points.

Sephora is number one

Earning the top spot this year is Sephora, which racked up 55 out of a possible 66 points. Starbucks was second with 50.5 points, followed by The Home Depot (46.5 points), Dunkin' Donuts (44.5 points), and Amazon (43 points).

“Sephora is honored to be ranked top once again in the RSR Benchmark study,” said Lisa Kueffel, vice president of client experience at Sephora. “Gift cards are a key element of our digital strategy focused on delivering excellent omni-channel experiences to our clients. Working in partnership with CashStar has helped us to grow our program and achieve our goals.”

CashStar President and CEO Ben Kaplan says a number of its clients are represented in the upper ranks of the survey.

“We are pleased to see that merchants are investing more in digital gifting and striving to improve the experiences they provide to consumers,” he said.

The survey authors note that Sephora got high marks for scoring well in the top three criteria: discoverability, purchase experience, and recipient experience.

Importance of digital gift cards

This year, 81 of the 100 merchants in the judging offered digital gift cards. RSR said it updates its criteria each year to focus on capabilities that set retailers apart. These criteria evolve each year so it keeps retailers on their toes.

“Consumers are increasingly engaging with retailers through digital channels first, creating a demand for the retailer to be where the customer is,” said Nikki Baird, managing partner at RSR Research.

That, she says, requires retailers to be able to handle all the things a customer wants from them in the digital space, and that includes gift cards.

“We’ve learned over the years just how complex digital gifting is on the desktop. This year leaders excelled at mobile,” Baird said. “However, too many of those evaluated are continuing to struggle with mobile optimization of their programs.”

Gift cards continue to be a bigger part of the holiday shopping season, as well as becoming the go-to gift for grandparents who have a hard time keeping up with grandchildren's evolving tastes.

Gift cards now account for more than $100 billion in sales each year. About 93% of consumers either give or send one.

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