Selling digital gift cards is one of the fastest ways for a brick-and-mortar business to move into the online market and secure immediate cash flow.
Here’s how to create gift cards for your business: Set up a simple online store and share your URL with customers who want to support you. Customers can buy and pay for gift cards through your new online store, and receive them by email.
Meanwhile, you can track and manage all gift cards in Shopify as customers redeem them in the future. As you launch new products that can be purchased online, or make your products available for local delivery or pickup, customers can redeem gift cards at checkout.
Let’s go over how to create gift cards for your business, why you’d want to, and what to do once you’ve launched your gift cards for sale.
Gift cards offer a variety of benefits for merchants and customers alike, including:
💡 Note: Before you set up your store, you’ll need a logo for your business and a few photos that represent your brand. If you don’t have any on hand, you can source royalty-free stock photos from Burst.
There are two ways to create digital gift cards for your Shopify store:
It’s possible to sell digital gift cards on all Shopify plans. Log in to your admin and navigate to Products > Gift cards > Create gift card.
This will activate gift card features and allow you to create your first gift card in draft mode.
When finished inputting the information, click Save.
To create and publish a gift card, making it available for purchase, navigate to Gift cards. Click Add a gift card product. You can only add a gift card product once.
Next, you’ll need to input the gift card information, including:
When you’ve inputted all the data, click Save gift card product.
To make your gift card public and available for sale on one or more sales channels, click View gift card products and select the gift card you want to publish.
In the Sales channels section, make the gift card product available to the sales channel of your choice and then click Save. This will enable people to purchase the gift card via the selected channel(s).
To add additional denominations, you can create variants for the gift card. Here, you can update the title, price, and image as needed.
If you want more features and functionality, you can also install a paid third-party app from the Shopify App Store. Some top picks include:
Gift cards are sold like products, but gift card sales are reported differently. You can use the gift card sales report to track your gift card sales. Note that gift cards you issue for free aren’t reported here.
Gift card orders will appear in the gift cards sales report, while the amounts paid will appear in the payments report.
Your gift card sales report will show you the following information:
Note: Gift cards you issue for free from the Shopify admin don’t appear in the gift card sales report.
You can also view your Gift cards outstanding balance report. This shows the daily balance of all gift card transactions, including the following:
To see a full list of your active gift cards, head to Products > Giftcards. Each gift card is tracked here, so you can see the customer’s information, their current balance, and when they purchased it.
These gift cards will be redeemable through your Shopify store at a future date, even as you add new items that are available online or for pickup.
Now that you know how to create and customize a gift card, here are ways to expand the program.
A custom gift card image that reflects your brand will look more professional and personal. Even if you’re not a designer, you can quickly create one for free using Canva’s gift certificate maker and replace your gift card image with it on your product page.
If your brand is bold, go for a playful, colorful design to match your company’s personality.
You can also keep it simple and use your logo and/or a dollar amount to indicate the gift card value. That’s the route OMA Designs took with its digital gift cards.
One way you can reward loyal customers for supporting your brand is by giving them a discount for purchasing a gift card for a larger amount. Not only does this increase the amount of immediate cash flow you can generate per sale, it’s a nice way to say thank you to your customers.
Don’t be afraid to reach out to your most loyal repeat customers. Incentivize them to support your business now by offering a discount when they purchase a gift card.
You can create one discount to apply across all gift card denominations or discounts that apply to specific denominations or purchasing thresholds.
Below is an example of creating a 15% automatic discount applied across all gift card tiers. Customers will see this discount automatically applied at checkout, but remember to also communicate it upfront on your product page:
If you have an existing website your customers are familiar with or you simply want to sell your gift cards on another website, you can do so using Shopify’s Buy Button channel.
You can embed a Buy Button on another website so customers can purchase your products there. Simply install the Buy Button sales channel to create one, customize the color and layout, and then generate an embed code to copy and paste into another website.
The easiest way to use gift cards to build customer loyalty? Simple: Make it part of your customer loyalty program. A great place to begin is to offer a gift card to customers on their birthday. It doesn’t have to be a hefty expense.
Think about the number of people you have in your customer loyalty program and the discount amount you could comfortably provide to each of them. Keeping this in mind can help you stay within your budget, especially if you’re a newer retailer.
If your business has a mobile app, you can also take this a step further by making gift cards accessible there. This provides an incentive at the tip of your customers’ fingers—which can lead to more immediate purchases for your business.
When you have a brick-and-mortar store, chances are you’re aware of a similarly sized business that provides a complementary service or product to yours. By collaborating with a business, you can use gift cards to benefit each business while increasing customer loyalty.
A partnership can help to widen the services or products you offer to your customers, resulting in a win-win for all parties involved. You can increase sales for the business and offer discount prices for the customer.
Gift cards are increasingly popular during the holidays, particularly for last-minute gift shopping. Convenience is key. Customers can pick a gift card up at checkout, online or in-store, even when shipping deadlines have passed. This helps to position you, the retailer, as reliable. The result? Shoppers who keep coming back.
Taking a seasonal approach with gift cards is another way to incentivize customers to come into your brick-and-mortar store, too. Encourage customers to come on specific days, like Black Friday Cyber Monday (BFCM), to redeem a gift card with purchase. Or try pairing a free gift card with other sales strategies like a buy one, get one (BOGO) promo to get customers to buy with you during the holidays.
Gift cards are incentivizing in themselves, but when combined with a discount, it’s difficult to ignore. You could use a discount with your business’s gift cards as a way to encourage customers to visit your physical store, for example. Offer an extra 15% to 20% off a purchase if the gift card is used in-store versus online.
The discount doesn’t have to be used with the gift card either. Instead, encourage customers to use their gift card (either online or in-store) by advertising that they’ll get a special offer, coupon, or reward upon purchase.
When customers bring a complaint, either in-store or through email, there’s a way to resolve it in terms of what you’ll provide to apologize for the specific inconvenience. With a gift card, you can easily do this in a way that says you hear the complaint, are taking it seriously, and appreciate their business.
When you acknowledge the customer and make their input feel valued, you can reap the rewards of increased brand loyalty and sales.
We all know what it’s like to be on Instagram and scroll past reposts from family and friends trying to win a product, service, bundle, or gift. While it seems like a one-in-a-million chance, there’s still an inkling of hope you could be chosen—especially if it’s a product you want from a brand you love.
This method obviously resonates well with shoppers, and social media contests and giveaways can be easily executed with gift cards. To do this yourself, offer a gift card of decent value—a lot more people will be interested in a $200 gift card than a $10 one—but make sure it’s within your budget.
After you initially promote the contest, be sure you stay active on your social media platforms. If someone responds with a complaint, always reply. And even if someone simply retweets your post, give it a like so they know you’re paying attention and appreciate their participation.
Gift cards can be an incentive to return to abandoned carts, giving people another reason to consider completing the purchase.
Imagine leaving five items in your cart. A day or two passes, and you get an email from the retailer with a $5, $10, or even $15 gift card inside. Chances are, it takes you no time to make your final purchase.
With this small incentive, customers can make their purchase with confidence, which leads to a positive customer experience—and one that will keep them coming back for more.
Digital gift cards are a low-cost way to boost sales, customer loyalty, and brand awareness. You can do more than just sell gift cards. They can be tools for customer service, cart abandonment, and more. It’s easy to create and sell digital gift cards with Shopify.
Take control of your cash flow with Shopify Payments
Only with Shopify Payments can you track your orders and payments all in one place. Have a complete view of your finances, and accept local currencies and payment types for a smooth checkout experience.
Discover Shopify PaymentsYou can make your own gift cards for your business using Shopify’s native gift card app or a third-party tool, like Govalo or GiftKart, from the Shopify App Store.
Yes, businesses make money on gift cards. Shoppers may feel inclined to make a purchase they otherwise wouldn’t have made. Many gift card recipients spend more than the allotted amount, increasing profits for businesses.
Yes, gift cards help small businesses. Gift cards can help small businesses generate cash flow during times of need without having to invest in inventory or fulfillment at the time.
It’s free to offer digital gift cards via the Shopify native app.
Whether it's for your birthday, completing a survey or a recognition of helping a friend move, getting a gift card is always a pleasant experience. The giver is telling you to treat yourself to something you actually want. The card may be to a specific store where the gift giver knows you like to shop or general, allowing you to spend on whatever you like. Either way, receiving a gift card is always an awfully nice surprise.
But what about the issuers of the gift cards? How do companies use gift cards and most importantly, how can a company like yours be using gift cards to make money? It turns out that while gift cards are great for those that get them, they’re far better for the companies who issue them to their customers. Here, we’ll explore a bit about the types of gift cards, why they’re so good for your bottomline and how you can ensure you’re getting every penny out of them.
Looking to navigate the payments world and get the best deals & rates for your business? The pros at Swipesum can help — and we offer free consultations!
What are they anyway?
We’ve all seen gift cards for quite a while but there is a bit more to them than initially meets the eye. It’s important to note that there are really two types of gift cards, closed-loop and open-loop. Don’t let the names deceive you; they’re really quite straightforward.
Closed-loop credit cards are those that can only be used at the store at which they’re issued. So, for example, if you get a gift card to a clothing store, you can only use it at that location, not a nearby electronics store. For small businesses, closed-loop cards make the most sense because they restrict use to the specific store from which they were issued. This means you guarantee that you’re getting that customer back in the door and have the added benefit of the gift buying customer too.
You can get closed loop gift cards by either using your existing merchant account or by going through and independent vendor. Using your existing account is easy because it works with the point-of-sale system you already have. However, it can be a bit inflexible. Independent vendors are a great option because you can design a more robust gift card system, however you’ll pay for the service.
Open-loop gift cards are those that can be used anywhere because they are tied to specific card payment networks. These operate as more of a convenience for your customers; you’ll never be able to guarantee that you can get folks back in the door. You can apply some restrictions on the cards, but these can get costly.
So how can I make money?
Gift cards offer companies some very clear and unique ways to make money.
Low upkeep and start
Companies can produce gift cards yourself but more than likely, they partner with a gift card distributor. These distributors don’t charge all that much for the work. The cards themselves cost a few cents and companies will usually pay a very small percentage of the sale or a fixed price for use of the card.
Things get much cheaper and easier if you use a closed loop system with your merchant account bank. These programs are sometimes included as a free benefit of your relationship with the bank and you’ll pay a cheaper swipe fee since the dollars aren’t traveling along payment networks.
Locking in the customer
This goes without saying but if you’ve got a gift card from a big box store, you’re probably going to do some shopping there. Plus, the store gets two customers, the person who purchased the card and the person who received it. Both of those customers are more likely to spend additional money at the store as well as buying the gift card.
Rewards
Most businesses now have some kind of rewards program - gift cards make this much easier to manage and offer a nice incentive for your customers to use the cards as well. Many businesses will offer additional reward points for using gift cards. This makes your customers more likely to frequent your business.
Interest-free loan
You can think of a gift card purchase as essentially an interest-free loan. If a customer comes in and buys a $100 gift card at your widget store, they’re not walking out with any product for that value. Yes, someone might come along later and use the gift card, but you get to count that as income now for redemption on some future date. It’s also possible that…
Breakage
Gift card recipients don’t show up at all. We’ve all likely done it; you’ve lost a gift card or spent a large portion of it but wrote the remaining dollar or two off as a loss because you didn’t want to spend cash out of pocket. This can be the most profitable part of gift cards for companies. In fact, this is more common than you might think. By one estimate, up to 47% of the collected value of gift cards in the United States in 2022, nearly $21 billion, went to waste. That’s nearly $175 per person in the United States. You can realize some fairly legitimate profit from gift cards that are never redeemed alone.
Let’s get started!
Smart. The first thing you’ll want to do is to contact the payment processor you already work with. If you’re considering new payment processors or are starting a new business and need one, take a look at gift card options as a part of your decision process. Working with your existing payment processor is an extremely low cost and easy to offer gift cards. More than likely, they already have the capability and you already have the POS system, to support a system. If your processor doesn’t offer cards directly they almost certainly have a recommendation.
Like any decision involving your business, getting started with gift cards can be a daunting decision. While they’re easy products to offer and you’ll want to get them on shelves as quickly as you can, you might want a hand looking at all the options and ensuring you’re getting the best deal. Swipesum is there to help; we’ll work with you to determine the best option for your business and work to make sure you’re getting every penny possible.
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