Ideas, inspiration; as well as how, why, and what type of gift cards you should sell through your online store.
Your customers probably have at least one friend or family member who’s hard to shop for, which can make gift-giving stressful. A gift card could be just the ticket.
As a small business owner, offering gift cards is a time- and cost-effective way to simultaneously solve a problem for customers and help your business increase sales, boost brand loyalty, and reach new audiences in the process.
What is a gift card?
A gift card (or gift certificate) is a prepaid voucher that is valid for purchases at a particular brick-and-mortar or ecommerce store. Gift cards are loaded with a specific amount of cash at the time of purchase.
There are two types of gift cards:
- Physical. Tangible gift cards are typically the size and shape of a credit card and fit neatly into a customer’s wallet.
- Digital (or e-gift cards). E-gift cards are digital tokens that function like physical gift cards but are delivered by email or through apps.
Gift cards frequently have expiration dates and typically can’t be reloaded. The card no longer is valid once it expires or its value has been redeemed.
Benefits of offering gift cards to customers
Selling gift cards through an online store can help you manage cash flow and inventory, increase sales, and build your brand. Additional benefits include:
- Cash-flow management. When a customer purchases a gift card from your online store, you get paid right away—even if the value isn’t redeemed for months, if at all (since gift cards frequently go unused). Businesses can leverage this to weather a slow sales cycle by promoting gift cards for an immediate influx of cash.
- Reach new audiences. When you sell a gift card, you’ve essentially earned a referral. Most customers give away gift cards, so the recipient has an economic incentive to visit your online store—and may even feel a social obligation in case the friend asks, “What did you buy?”
- Increase sales. Have you ever used a $50 gift card to buy a $75 sweater? Gift cards get customers in the door. Once they start browsing your online store, you have the chance to make additional sales and increase your cart size.
- Build brand loyalty. Some businesses incentivize gift card purchases—say, by selling a gift card with a $50 value for $45 or providing the gift card purchaser with a discount code, credit, or loyalty program bonus points. These incentives can build brand loyalty, generate repeat purchases, and keep your brand top-of-mind with both gifters and recipients.
8 gift card ideas for small businesses
So you’ve decided to sell gift cards—now, what kind of gift card can you sell? Customers often look for gift cards in particular categories, and then seek brands they know and love, or that the recipient knows and loves. Check out these 10 common gift card categories and popular examples for an idea of where your offering could fit in.
- Product gift cards
- Gift cards for furry friends
- Task and service gift cards
- Gift cards that give back
- Arts and crafts gift cards
- Subscription service gift cards
- Gift basket gift cards
- Class or event gift cards
1. Product gift cards
A product gift card is a perfect gift for someone who you know likes certain brands and can’t justify spending money on them, or who you want to expose to brands you enjoy, but you’re uncertain of their size or specific tastes. And, if you sell food products, people buying your gift cards won’t have to worry about dietary restrictions. By offering product gift cards, your customers won’t need to know everything about the recipient's size or what colors they prefer to refer them to your brand.
For example, the apparel brand Outdoor Voices sells activewear for daily errands and adventures in the great outdoors. Recipients can use gift cards for the always-trendy exercise dress, a snuggly hoodie, or a spiffy pair of new shoes.
2. Gift cards for furry friends
Pet care company Rowan sells gift cards for shampoos, conditioners, and even pet-safe glitter and dyes. If your online store sells pet products, consider offering gift cards—the perfect gift for a friend with a new best friend.
3. Task and service gift cards
Gift cards aren’t just for physical products—offering task or service gift cards lets customers give the gift of time. Handy.com offers home cleaning, landscaping, furniture assembly, and even plumbing services through its network of highly rated and experienced providers. For example, Handy offers gift cards for three hours of house cleaning or two hours of furniture assembly, starting from $99.
4. Gift cards that give back
If your company donates a percentage of profits, offering gift cards can help your customers support local (or global) giving. For example, apparel and home goods company Darzah donates 80% of every dollar to funding job opportunities for Palestinian women.
5. Arts and crafts gift cards
Arts and crafts gifts can help spread holiday cheer—or just brighten up a tough day. See examples from Rainbow Vision, which sells art prints, and Silk & Willow, which offers hand-dyed goods for weddings and special events.
6. Subscription service gift cards
Many online subscription businesses sell gift cards or allow your customers to gift three-month, six-month, or even yearlong subscriptions. Pot Gang gift subscriptions help recipients get started growing their own indoor herb gardens, while Cocofloss gift subscriptions provide bath products and floss in fun flavors like banana daiquiri and passion fruit.
7. Gift basket gift cards
Offering gift cards that are redeemable for gift baskets allows you to introduce your suite of products to someone who is familiar with your brand but hasn’t tried all your products. And, it allows the gift giver to satisfy multiple preferences. You can create different packages based on themes like smells for bath or home goods brands, or around a certain cuisine, like mediterranean for food brands. With gift basket gift cards you can get creative and even partner with complementary brands to include their products.
8. Class or event gift cards
Even if you’re an ecommerce shop that sells products, offering classes or tutorials that complement your inventory can attract new audiences to your brand. Nonna Live sells its L'Oro Della Nonna Olive Oil, but also offers in-person classes via Zoom. It’s a way to reaffirm its steeped-in-tradition Italian brand. Purchasing ingredients to then make a meal with the olive oil producers is more than a purchase, it’s memory making.
How to make gift cards
Creating gift cards is easy. Follow these three steps to start selling your own:
1. Choose a gift card type
Decide whether you’ll provide physical gift cards, e-gift cards, or both.
2. Select a vendor and design your card
If you want to distribute physical cards, select a vendor to design your gift card. You can choose a completely customizable design or modify an existing one. Physical cards can be activated using the best POS system for your needs.
3. Order your gift cards and start selling
Order your cards and post them to your online store. Gift cards are loaded with cash at the time of purchase, so there’s no need to determine amounts before you order. Now, you’re ready to sell your gift cards.
Gift card ideas FAQ
What is the best way to offer gift cards to customers?
Offer gift cards that meet your customers’ needs. Consider providing both physical and e-gift card options, and make sure you either offer customizable amounts or sell cards at a range of price points: If your cheapest gift card costs $250, you might miss out on smaller sales.
Should I set restrictions or expiration dates on gift cards?
Federal law prohibits gift card issuers from setting expiration dates sooner than five years from the date of activation and places restrictions on inactivity fees. Setting a five-year expiration date can help business owners confirm that proceeds received from a gift card sale are no longer considered a liability for the company.
Should I set restrictions on where gift cards can be used—either online only or in physical stores?
Most gift cards are valid both online and in-store. To build brand loyalty and attract new customers, honor gift cards in both physical and digital locations.
Can gift cards be for a specific product or can they only be for a specific amount?
Gift cards are a form of payment. Just like cash, check, or credit, they are valid for any product or service offered by the issuing store.