News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Gifts That Keep on Giving

By Karisse Hendrick, Editor-at-Large,

Subscription gift sets are joining flowers and candy this Valentine’s Day Americans will spend an average of nearly $147 each on Valentine’s Day gifts this year, according to the National Retail Federation. And, while candy and flowers still top the list, curated sets of everything from makeup and food to gadgets to lingerie—many tailored to meet consumers’ specific tastes—are being purchased on a subscription basis as gifts and delivered monthly. Providing an original gift tailored to the receiver scores points for the giver when the gift is first given, and each month when the recipient opens a new package. The gift also keeps on giving for subscription merchants. Those who have learned to capitalize on this gift-giving phenomenon have experienced spikes in subscriptions around various holidays, and Valentine’s Day is no exception.

In a recent study, subscription-billing platform provider Recurly reported an 83 percent jump in same-store sales on Cyber Monday during the just-completed holiday shopping season. This increase equated to a 230 percent increase in total payment volume over the previous year.

“We have seen our subscription merchants targeting the right customers and offering gift-givers curated products and experiences, whether in physical goods or digital content, which leads to long lasting gifts for the consumers, and revenue for the merchants,” says Recurly CMO Frederick Felman.

Adapting subscriptions to gift giving

One such merchant that has learned to [hide for=”!logged”]capitalize on gift-giving holidays is premium jewelry subscription box company “Rocksbox.” By asking customers to fill out a style survey, Rocksbox curates three high-end jewelry items specific to members’ taste, allowing them to borrow these items for as long as they would like, until they would like to purchase the items for a reduced cost, or return and receive three new pieces of jewelry. Customers go to Rocksbox to try new jewelry styles before buying them or to only wear once with a specific outfit or for one occasion.

In addition to offering standard membership services direct to their members, they also have subscription packages in pre-paid increments of three, six or 12 months available specifically for gift givers. The packages remove any potential awkwardness of a gift-giver canceling a membership after a few months and they make it seamless for the recipient to renew their membership with their own card when the gift membership is about to expire.

“Gifting has been very important to our business,” says Maeve Ricaurte, associate marketing manager at Rocksbox. “We see a lot of viral sharing of products on social media by new customers excited to try our products and see a high number of them renewing their membership past the gift-subscription time period.”

Ricaurte says social media has provided the perfect feedback loop for its customers to “tell us what they love and what they want.” Members are able to communicate to stylists their tastes directly through Instagram, in addition to updating their customer profile on the site. Customers solicit instantaneous feedback on the new items that arrived in their monthly Rocksbox from their friends on Instagram, Facebook or Twitter and customers themselves created a Facebook group for Rocksbox members to share the jewelry paired with their outfits, with tens of thousands of like-minded individuals.

“The biggest thing we have learned when growing our subscription-based business is to listen to our customers,” says Ricaurte. “We pay attention to the language they’re using on social media and what they’re saying about our business to us and other users, and success has followed.”

Providing seamless payment options and personalized coupon codes for bloggers and other affiliates also has played a role in the company’s success.

The Benefit of Handing Off Subscription Billing

While Ricaurte says management recognizes that recurring payments presents some challenges, Rocksbox has chosen to rely on Recurly to manage its billing services and deal with headaches such as managing and reducing churn, the dunning process and storing card data.

“This allows us to focus the internal energy we would have spent on payments to be more creative in how we grow our business,” says Ricaurte. When asked about the biggest billing challenge Rocksbox still has, Ricaurte adds that ensuring customers are reading and understanding the terms of use for their services continues to be a challenge.  Felman says this issue is typical for subscription merchants and offers some best practices their merchants have successfully implemented.

“Merchants who present their terms of service plainly and clearly on their Websites, especially at the point of conversion, see a lot of success,” he notes. “Often, this information is seen on the merchant’s pricing page, where plans are compared and chosen. Another technique is to use an affirmative check that the customer has read the terms of service when entering payment information.”

These practices can help steer customers to read the terms of service at the time of signing up. However, if they still don’t understand all of the terms, having this language on the checkout page and requiring they select a radio button stating the terms and conditions were read can assist in disputing and reversing some chargeback reason codes.

A New Opportunity

Girlfriends, boyfriends and spouses all over the world are looking for the perfect gift to demonstrate their affection for each other on Valentine’s Day. Gift memberships and subscriptions are a creative way to say “I love you,” and make those feelings last past February. For subscription merchants looking to expand their reach and their incoming sales revenue: embrace the idea of subscription gift-giving. Making it easy for consumers to purchase memberships as gifts, enabling family, friends and recipients to receive curated products and experiences is a new area of opportunity and one that can resonate with consumers.

“Receiving a subscription box with items you may never have purchased for yourself is a thoughtful gift; and lasts much longer than flowers on the table,” concludes Felman.


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Daniel Leibovitch