Face value is the amount a gift card redeems for; trade price is the amount a business pays a distributor for that same card. The difference between the two, quoted as a percentage off face value, is the unit of account for the whole gift card trade.
A $50 card bought at 5% off face costs the buyer $47.50 and still loads $50 of value at redemption. Every serious price list in the industry, from issuer contracts down to reseller catalogues, is written in this language.
Why “percent off face value” and not markup
Retail thinks in markup: buy at one price, add a percentage, sell higher. Gift cards invert this, because the selling price is mostly fixed. A $50 card is worth $50 to the person redeeming it, and most of the time it sells at or near $50. What varies is how far below face you managed to buy.
Quoting percent off face does two jobs at once. It tells a buyer their buy-side terms without any reference to the sell price, and it makes brands comparable: 5% off face means the same thing on a $10 card and a $500 card. A distributor’s catalogue with hundreds of brands would be unreadable in any other unit.
Why cards trade below face at all
An issuer selling a $50 code for $47.50 is not losing money; it is buying two things.
The first is distribution. Every card sold through a reseller is a sale the issuer did not have to win itself: no ad spend, no checkout, no local payment methods. The trade discount is a distribution fee, paid in kind.
The second is float and breakage. The issuer is paid today for value that will be redeemed later, sometimes much later, and a share of it never gets redeemed at all. Cash now for services later is a good trade, and the discount reflects that.
Why the discount differs so much by brand
Discounts follow demand, not generosity. The brands everyone asks for, big gaming and platform credit among them, discount the least: low single digits off face for the most demanded names, because distributors will carry them at thin terms just to have them in the catalogue. Niche brands discount deeper, because they need the shelf space more than the shelf needs them.
Region matters too. The same brand can trade at different discounts in different markets, depending on local competition and how the issuer prices distribution there.
How the spread travels down the chain
Each link in the chain buys at one discount and sells at a smaller one, keeping the difference. Issuer to aggregator, aggregator to distributor, distributor to reseller: the discount narrows at every step, and what remains at the end is the reseller’s working room.
The numbers below are an illustration with round figures, not a quote from any real price list:
| Step | Amount |
|---|---|
| Face value of the card | $50.00 |
| Trade price at 5% off face | $47.50 |
| Reseller sells at 2% off face | $49.00 |
| Gross spread kept by the reseller | $1.50 |
That $1.50 is gross, not profit. Payment processing, fraud reserve and support all come out of it, which is why reseller economics reward volume so heavily. It also explains why buy-side terms matter more than anything on the sell side: a half point better discount at the sourcing stage can be a third of the whole spread.
Frequently asked questions
What does percent off face value mean?
It is the discount between what a gift card redeems for and what a trade buyer pays for it. A $100 card at 6% off face costs $94 and still delivers $100 of value at redemption. The metric is standard across the industry because it works identically at any denomination and makes terms comparable across brands and regions.
Why do gift cards sell below face value?
Because the issuer is paying for distribution and getting cash early. Each card sold through the trade channel is a customer acquired without the issuer’s own marketing spend, and the money arrives before the value is redeemed. A small share is never redeemed at all. The discount is the price of those benefits, not a loss.
Who sets the trade price?
The issuer sets the first discount when it signs distribution agreements. Each intermediary then prices its own tier: an aggregator resells at a smaller discount than it bought at, a distributor smaller again. By the time a reseller sees a price, several parties have each kept a slice, which is why terms improve as a buyer moves closer to the source.
Is trade price the same as wholesale price?
In practice yes: trade price is what the gift card industry calls its wholesale price. The difference is in how it is quoted. Wholesale trades usually quote a unit price, while gift cards quote a percentage off face value, because the redemption value is fixed and the discount is the variable. A quote of 5% off face tells a buyer everything it needs to, at any denomination.
Why do the most popular gift card brands have the smallest discounts?
Because discounts follow demand. The most demanded gaming and platform brands anchor a catalogue, so distributors carry them at low single digits off face rather than lose buyers who expect those names on the shelf. Niche brands need distribution more than distributors need them, and price deeper to earn the space. Region shifts the picture too: the same brand can trade at different discounts in different markets.