Why Gift Cards Are the Default Rewards Rail in India
Published
December 22, 2025
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Hubble Editorial Team
Rewards Rails vs Rewards Types
A rewards rail is the mechanism used to move value from a platform to a user. In India, gift cards have become the most common rewards rail for consumer apps.
This is driven by structural and regulatory factors.
Why Gift Cards Work Well in India
Gift cards offer:
- predictable denominations
- brand familiarity
- controlled value distribution
- simpler compliance than cash
- easy partner settlement
They function as quasi-cash without the operational overhead of wallets.
Regulatory and Operational Advantages
Compared to cashback or stored value:
- gift cards reduce regulatory exposure
- settlement is partner-based
- expiry and breakage are manageable
- fraud patterns are well understood
This makes them suitable for large-scale programs.
Limitations of Gift Cards
Gift cards introduce challenges:
- inventory constraints
- partner dependency
- resale abuse
- redemption friction
These challenges are manageable only with proper infrastructure.
Why Infrastructure Is Required
Without infrastructure:
- partner APIs vary widely
- failures are hard to detect
- reconciliation becomes manual
Infrastructure platforms standardise gift cards into a reliable rewards rail.
tldr;
Short summary
Rewards rails move value from platforms to users, and in India, gift cards dominate due to their predictability, compliance ease, and partner‑based settlement. They act as controlled value instruments but bring challenges like inventory limits and fraud risk—addressed through infrastructure that standardizes APIs and automates reconciliation.
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About the Author
Hubble Editorial Team
Hubble Editorial Team shares practical insights on building and operating reward and incentive systems inside digital businesses. The team writes for product and growth leaders across fintech, healthtech, marketplaces, and B2B SaaS, focusing on real-world architecture, behavioral design, compliance, and ROI — not marketing theory. All content reflects challenges seen in production incentive programs at scale.
