Gift Box: How We Cut GST Burn and Improved Spin by 7%
Approximately 15% of daily deposits on the platform are re-deposits, where users withdraw funds today only to re-deposit them the next day. This behavior creates two major challenges :
Tax Burden: The platform incurs unnecessary GST payments on these redundant deposits, amounting to approximately ₹30 lakhs per day.
Liquidity Impact: Frequent withdrawals reduce system liquidity, negatively affecting the margin spin which we want to solve.
Every time a user deposits ₹100, MPL has to pay GST on it. That ₹100 actually includes tax. So the real deposit is about ₹78, and the remaining ₹22 goes as GST.
To reduce unnecessary daily withdrawals, the platform introduced a gift box with rewards for not withdrawing, helping build a habit of holding funds. The rewards scale based on user value, making them more personalized. This approach helps lower GST costs, improve liquidity, and lead to higher margin spin.
The problem with the 6-day construct is that withdrawal is an extremely high-intent action for a user, and there's a very low probability that they would wait 6 days for a reward. There can be many instances that outweigh the end reward in their mind, leading to withdrawal.
What I was thinking is to lock the user’s withdrawal by giving them a reward at first glance - by doing this, I win the user in that situation and ensure that the user can't withdraw by locking it. Since 6 days is too long, what I proposed is to do it for 24 hours and test this flow.
Based on user type, we had functionality to show any permutation of 3 rewards for them. We thought that we should also have another flow in place where there is no locking action and just gift box information, and A/B test both flows to see which performs better.
So in Test path B flow we have just information across touchpoints for the user and post 24 hours they could claim the gift box
We saw really good results with test group A as expected because people liked claiming the rewards upfront, but we also received a number of customer tickets regarding why their withdrawal is locked because post claiming we did not allow user to enter the withdraw screen, which we improved with our next release.
Post this change, the CS tickets did not go up and remained under control. The gift box worked so well that we wanted to use it as a central reward mechanism across other products as well, like Opinio, loyalty features, etc.
If you’re wondering what margin spin is, it is CM1 divided by deposit. So if people stop withdrawing, we will get the same margin (CM1) from a lower deposit amount, and hence, margin spin will improve.
We saw a 5–8% improvement in margin spin because of the gift box flow. It also helped me trust my instincts more—since I always try to put myself in the user’s shoes and ask, “If this were me, would I take the deal or not?”
