The Complete Shopify Gift Cards Strategy Guide for 2025

Gift cards are one of the most underutilized revenue strategies in ecommerce. Most Shopify merchants think of them as a simple feature to enable and forget about. But gift cards are actually a powerful tool for generating immediate cash flow, acquiring new customers at zero cost, and increasing lifetime value.

This guide will show you exactly how to build a gift card strategy that drives meaningful revenue—from technical setup to advanced marketing tactics that top brands use to generate millions in gift card sales.

1. Understanding the Business Case: Why Gift Cards Matter More Than You Think

The Financial Benefits of Gift Cards

Immediate cash flow is the most obvious advantage. When someone buys a gift card, you receive money immediately—before you ship any product, before you incur fulfillment costs, before inventory costs. This is incredibly valuable for managing cash flow, especially during slow seasons. You can use gift card revenue to purchase inventory, fund marketing campaigns, or cover operational expenses without waiting for product sales.

Breakage revenue is the industry term for unredeemed gift cards. Studies show 10-20% of gift cards never get used. This varies by industry and card value, but it's real. When cards go unredeemed, that money becomes pure profit. You've already recognized the revenue (in most jurisdictions after the escheatment period), but you never have to fulfill anything. It's like getting paid for doing nothing. While you shouldn't rely on breakage or make redemption intentionally difficult, it's a legitimate financial benefit.

Higher average order values happen naturally with gift cards. Research shows gift card recipients spend 38% more than the card value on average. Someone receives a $50 gift card, but they find items totaling $75, so they add their own money to complete the purchase. This is almost guaranteed upsell—the recipient already has purchasing intent, and they're psychologically primed to spend because the base amount feels "free." You're not just getting the gift card sale; you're getting incremental revenue on top.

Customer acquisition at zero cost is one of gift cards' most powerful benefits. When someone buys a gift card, they're introducing your brand to someone new—a friend, family member, or colleague who might never have discovered you otherwise. You pay no acquisition cost for this new customer. They arrive already trusting you (because someone they trust recommended you), and they're guaranteed to visit your store at least once. Some percentage converts into repeat customers. This is viral marketing that actually generates revenue instead of costing money.

Gift Cards vs Traditional Marketing Spend

Compare gift cards to paid advertising and the economics are striking. With Facebook or Google ads, you pay upfront to acquire customers who might convert. Average customer acquisition costs in ecommerce range from $45-$100 depending on industry. With gift cards, you get paid upfront to acquire customers. The gift card buyer pays you to introduce your brand to someone else. Your acquisition cost isn't just zero—it's negative.

The lifetime value of gift card recipients can be substantial. They arrive with zero skepticism (a trusted person vouched for you), they engage with your brand deeply (browsing to find what they want), and if they have a good experience, they become organic customers. Studies show 38% of gift card recipients return to make additional purchases within six months. You're not just making one sale; you're potentially adding a valuable customer to your base.

2. Setting Up Gift Cards on Shopify: Technical Foundation

Shopify Gift Card Requirements and Basics

Gift cards are available on most Shopify plans, but there are important distinctions. Basic Shopify and higher plans include digital gift cards by default. Shopify Starter does not include gift cards. If you're on Starter and want to offer gift cards, you'll need to upgrade to Basic. This is worth it—gift cards can easily generate enough additional revenue to cover the plan difference.

Digital vs physical gift cards work differently on Shopify. Digital gift cards (the default) are delivered via email with a unique code. They're instant, free to deliver, and the customer can forward them easily. Physical gift cards require using Shopify's physical gift card product option plus actual plastic cards (which you can order from Shopify or third-party suppliers). Physical cards feel more premium and work well for in-person gifting, but they add fulfillment costs and shipping time. Most stores should start with digital and only add physical if there's clear demand.

To enable gift cards: Go to Products in your Shopify admin, click "Gift cards," and hit "Enable gift cards." Shopify automatically creates a gift card product page at yourstore.com/products/gift-card. This page is customizable—you can edit the description, add images, and modify how it appears. By default, customers can choose from preset amounts ($25, $50, $100, $150, $200) or enter a custom amount. This flexibility is good—let customers decide what makes sense for their budget.

Customizing Your Gift Card Product Page

The default gift card page is functional but generic. To maximize sales, treat it like any other product page—write compelling copy, add lifestyle images, and explain the benefits. Don't just say "Buy a gift card." Explain why: "Perfect for any occasion," "Let them choose exactly what they want," "Delivered instantly via email—great for last-minute gifts." Frame it as the solution to the buyer's problem (finding the right gift).

Add high-quality images that communicate the gift-giving experience. Don't show a boring gift card code. Show someone happily shopping on their phone, a beautifully wrapped gift with your logo, or lifestyle imagery that represents your brand. The image should make the buyer visualize the recipient's happiness. Gift cards are emotional purchases—the buyer wants to make someone happy. Visual storytelling matters here.

Denominations should match your average order value and customer psychology. If your AOV is $75, offer denominations around that amount: $50, $75, $100. Don't offer $10 or $500 if those amounts don't align with how people actually shop your store. The psychology of gift card amounts is interesting—even numbers feel more substantial ($50 vs $45), round hundreds feel generous ($100 vs $99), and offering a range gives buyers flexibility without overwhelming them. Test different denominations to see what sells best.

Designing Your Gift Card Email Template

The gift card email is the moment of truth—this is what the recipient sees first. It needs to be beautiful, clear, and easy to use. Go to Settings > Notifications > Gift card created. This is the email template Shopify sends when someone purchases a gift card. Customize it heavily. Add your logo, match your brand colors, write warm copy that makes the recipient excited to shop, and make the redemption code impossible to miss.

Include clear instructions on how to redeem. Don't assume everyone knows how gift cards work. Write something like: "To use your gift card, just shop our store and enter this code at checkout. Your balance will be automatically applied." Make the code large, in a contrasting color, and copyable with one click. Add a prominent button that says "Start Shopping" linking directly to your store.

Personalization options increase gift card appeal. Shopify allows the buyer to add a custom message to the recipient. This is enabled by default, but you can customize the message field's prompt. Instead of "Message to recipient," try "Add a personal note (optional but recommended!)" or "Make it personal—add a message they'll love." Buyers who add messages are more emotionally invested, and recipients appreciate the personal touch.

3. Strategic Pricing and Offering Options

Choosing the Right Denominations

Your denomination options directly impact sales volume and customer psychology. Too few options and customers feel constrained. Too many and they experience decision paralysis. The sweet spot is usually 4-6 denominations spanning your typical product range. If you sell items from $20-$200, offer: $25, $50, $100, $150, $200. This covers different budget levels without overwhelming the buyer.

Custom amounts give buyers flexibility, but they can also lead to lower average values. When presented with "choose any amount," many people default to round numbers in the lower range ($25, $50). However, custom amounts are valuable for specific situations—someone wants to give exactly $75, or they're pooling money from multiple people for a group gift. Enable custom amounts but set a minimum (like $10 or $25) to avoid tiny-value cards that aren't worth the processing fees.

Bonus value promotions drive gift card sales during key periods. Instead of discounting (which devalues your brand and cuts margin), offer bonus value: "Buy a $100 gift card, get $120 in value." The buyer pays $100, but the recipient gets $120 to spend. This feels generous, drives larger purchases (buyers choose higher denominations to get more bonus value), and the extra $20 almost always gets spent alongside the recipient's own money—meaning you're not really giving away $20, you're incentivizing a larger order.

Promotional Gift Card Strategies

Holiday gift card promotions are obvious but critical. The weeks before Christmas, Mother's Day, Father's Day, Valentine's Day, and graduation season are prime gift-giving moments. Promote gift cards heavily during these periods with dedicated email campaigns, homepage banners, and social media posts. Position them as the perfect last-minute gift or the solution for "hard to shop for" people.

Flash sales on gift cards can generate quick cash flow when you need it. "24-hour only: Buy $100 gift card, get $120 value." This creates urgency, drives immediate purchases, and injects cash into your business fast. Use this strategy strategically—during slow months, before big inventory purchases, or to hit end-of-quarter revenue goals. Don't do it too often or customers will wait for promotions instead of buying at face value.

Bundle gift cards with products for gifting convenience. Create product bundles that include a physical item plus a gift card: "Skincare Set + $50 Gift Card." The buyer gets a complete gift solution, and you get the immediate gift card revenue plus product sale. This works especially well for corporate gifting and holidays when people are buying multiple gifts. Make it a one-click solution to gift-giving stress.

4. Marketing Your Gift Cards Effectively

On-Site Promotion Strategies

Add gift cards to your main navigation. Don't hide them in the footer or a dropdown menu. Create a top-level nav item called "Gift Cards" or "Give the Gift of Choice." This signals to visitors that gift cards are a legitimate, valuable option. During holiday seasons, make this nav item even more prominent—use a different color, add a badge saying "Perfect for Gifts," or make it the first item after your logo.

Homepage banners during gift-giving seasons should actively promote gift cards. Use compelling imagery and copy: "Last-Minute Shopping? Give the Perfect Gift in 60 Seconds." Include a clear CTA button linking to your gift card page. Rotate different value propositions: instant delivery, always the right choice, no wrapping required, perfect for anyone. Test different messages to see what resonates with your audience.

Exit-intent popups can capture abandoning visitors with a gift card offer. When someone is about to leave without purchasing, show a popup: "Before you go—Looking for the perfect gift? Give them exactly what they want with a gift card." This is especially effective during high-traffic periods when many visitors are browsing but not finding what they need. You convert browsers who weren't going to buy anyway into gift card customers.

Email Marketing for Gift Cards

Dedicated gift card campaigns should run regularly, especially in Q4. Send an email focused entirely on gift cards: why they're the perfect solution, how easy they are to give, and the value they provide. Segment your list—send one version to customers who've purchased gifts before, another to customers who buy for themselves (encouraging them to share gift cards with others), and a third to inactive subscribers (a gift card might bring their friend or family member in).

Include gift cards in abandoned cart flows. If someone abandons their cart, your recovery email can include: "Not sure this is the right choice? Send them a gift card instead and let them decide." This gives hesitant buyers an alternative that still results in a sale. It acknowledges their uncertainty while offering a solution that removes the pressure of choosing the wrong item.

Post-purchase emails can drive gift card sales through referrals. After someone makes a purchase, send a follow-up: "Love your order? Share the experience—send a gift card to a friend." Satisfied customers are your best salespeople. Make it frictionless to buy a gift card for someone else right after they've had a positive experience. Offer a small incentive if needed: "Send a friend a $50 gift card and get 10% off your next order."

Paid Advertising for Gift Cards

Facebook and Instagram ads during peak gifting seasons should include gift card creative. Create dedicated ad sets targeting gift-giving demographics: people aged 25-55, in relationships, with birthdays in their network coming up. Use copy like "The Gift That's Always Right" or "Perfect for Anyone, Delivered Instantly." Link directly to your gift card page, not your homepage. Make the conversion path as short as possible.

Google Ads for high-intent keywords can capture ready-to-buy traffic. Bid on keywords like "[your niche] gift card," "online gift card [your industry]," and "last minute gift [your niche]." These searches indicate someone actively looking for gift cards in your category. Your ad should emphasize instant delivery, easy redemption, and universal appeal. Link to a gift card landing page optimized for conversion.

Retargeting campaigns can remind visitors about gift cards. Someone browsed your store but didn't buy? Show them an ad a few days later featuring gift cards: "Couldn't find what you needed? Let them choose with a gift card." This is particularly effective for people who spent time on product pages—they're interested in your category but maybe uncertain about specific items. A gift card removes that friction.

5. Increasing Gift Card Redemption and Lifetime Value

Making Redemption Effortless

The easier you make redemption, the more gift cards get used—and the more additional revenue you generate. Remember, you want cards to be redeemed because recipients almost always spend more than the card value. Optimize every part of the redemption experience. Clear instructions in the email, prominent "Shop Now" buttons, and a frictionless checkout process where the code applies automatically if clicked from the email.

Gift card balance visibility helps recipients use their full value. Shopify doesn't automatically show remaining balance after partial use, which can lead to abandoned value. Send a follow-up email after partial redemption: "You have $23.50 remaining on your gift card! Here's your code: [CODE]. Shop now to use your balance." This reminder converts dormant balances into additional sales. You can automate this with apps like Gift Card Hero or custom Shopify Flow automations.

Multiple payment methods for overage amounts make it easy to spend more. If someone has a $50 gift card but finds $80 worth of items they want, the checkout process needs to seamlessly handle the $30 difference. Shopify does this automatically—applying the gift card first, then charging the remaining balance to their payment method. But communicate this clearly: "Have a gift card? Apply it at checkout and pay any difference with a credit card." Remove any confusion that might prevent larger purchases.

Re-engagement Campaigns for Unredeemed Cards

Not all unredeemed cards are profit—some represent lost opportunities. If someone received a gift card but hasn't used it in 30-60 days, they might have forgotten about it or weren't initially interested in your products. A well-crafted re-engagement email can bring them back: "You still have $50 to spend! Check out what's new this month." Include product recommendations, highlight new arrivals, or offer a limited-time bonus: "Use your gift card this week and get free shipping."

Expiration reminders drive urgency. If your gift cards have expiration dates (check local laws—some jurisdictions prohibit expiration or require minimum periods), send reminders 60 days, 30 days, and 7 days before expiration. The closer to expiration, the more urgent the messaging: "Don't lose your $75! Your gift card expires in 7 days." This is legitimate urgency that converts dormant balances into sales.

Personalized product recommendations increase relevance. Gift card recipients might not know what you sell or what they should buy. Send targeted emails based on your product categories: "Not sure where to start? Here are our best-sellers" or "Your $100 could get you this, this, and this." Show them exactly what their gift card value translates to in actual products. Make it easy to envision what they could buy.

Turning Gift Card Recipients Into Loyal Customers

First impressions matter enormously with gift card recipients. This is often their first interaction with your brand. Deliver an exceptional experience: fast shipping, beautiful packaging, helpful customer service, easy returns. If they have a great first experience, they'll come back—becoming organic customers who generate lifetime value far beyond the gift card amount.

Post-redemption engagement keeps them connected. After someone uses a gift card, treat them like any new customer: add them to your email list (with permission), send a welcome series introducing your brand story and product range, offer a discount on their next purchase to encourage a second order. The goal is converting a one-time gift card user into a repeat customer. Focus on building the relationship beyond that first transaction.

Loyalty programs for gift card users can accelerate retention. If you run a loyalty or rewards program, enroll gift card recipients automatically (or with opt-in). Let them earn points on their gift card purchase, even though they didn't pay for it. This creates immediate investment in your brand: "You already have 50 points toward your next reward!" They're more likely to return and make additional purchases to use those points.

6. Advanced Gift Card Strategies and Tactics

Corporate Gifting Programs

Bulk gift card sales to businesses can become a significant revenue stream. Companies buy gift cards for employee rewards, client appreciation, event prizes, and holiday gifts. Corporate buyers purchase in volume—$5,000 to $50,000 or more in gift cards at once. This is instant cash flow and introduces your brand to dozens or hundreds of new potential customers.

Setting up a corporate program doesn't require complex infrastructure. Create a dedicated landing page explaining your corporate gift card options: minimum purchase amounts, volume discounts (5-10% off for orders over $1,000), custom denominations, and personalized delivery options. Include a contact form or email specifically for corporate inquiries. Position gift cards as the perfect solution for companies that want to give employees choice while supporting your brand.

Outreach to local businesses and organizations can generate bulk orders. Identify companies in your area or industry that might need corporate gifts: HR departments buying employee rewards, event planners needing prizes or sponsor gifts, nonprofit organizations purchasing donor thank-you gifts. Reach out directly with a value proposition: "Looking for employee gifts they'll actually use? Our gift cards let them choose exactly what they want from [your category]." Offer a sample or small discount for first-time corporate buyers.

Seasonal and Event-Based Campaigns

Holiday planning should put gift cards front and center. Q4 (October-December) accounts for 30-40% of annual gift card sales. Start promoting in October with early-bird campaigns. November focuses on Thanksgiving, Black Friday, and Cyber Monday gift card deals. December is all about last-minute gifting and instant delivery. Each phase requires different messaging and creative emphasizing what matters most in that moment: planning ahead, great deals, or urgency.

Mother's Day, Father's Day, and Valentine's Day are massive gift-giving occasions where gift cards thrive. People want to give something thoughtful but struggle to choose the right item. Position your gift cards as the solution: "Let Mom choose exactly what she wants" or "Give him the gift of choice." Run campaigns 2-3 weeks before each holiday, then increase urgency in the final week with "Last-Minute Gift" messaging emphasizing instant delivery.

Graduation season, teacher appreciation week, and back-to-school periods offer additional opportunities. Segment your audience and target relevant groups: parents of graduates, parents of school-age children, teachers themselves. Tailor messaging to the occasion: "Reward their hard work with a gift card" or "Thank a teacher with the perfect gift." These secondary occasions add up—each can generate meaningful gift card revenue if you actively promote them.

Combining Gift Cards With Other Marketing Strategies

Gift cards as referral rewards create a self-funding acquisition loop. Instead of giving referring customers account credit or discounts, give them gift cards. When someone refers a friend who makes a purchase, send the referrer a $10 or $20 gift card. This feels more valuable than abstract "credit," it's easier to understand, and it drives another purchase from your existing customer. The referral generates revenue, the gift card drives another order, and you're acquiring customers through trusted recommendations.

Contest and giveaway prizes using gift cards increase participation. Running Instagram or email giveaways? Offer gift cards as prizes instead of specific products. This broadens appeal—more people enter because they can choose what they want if they win. You're not stuck shipping a product that might not fit or match the winner's preferences. And winners who receive gift cards almost always spend more than the card value, generating additional revenue even from contest prizes.

Influencer partnerships can include gift cards for audience giveaways. When working with influencers, provide gift cards for them to give away to their followers. This generates engagement (followers comment/share to enter), exposes your brand to the influencer's audience, and converts winners into customers who might make additional purchases. It's more cost-effective than traditional influencer fees and generates measurable results: X gift cards distributed = Y new customers acquired.

7. Tracking Performance and Optimizing Your Gift Card Strategy

Key Metrics to Monitor

Gift card sales volume and revenue should be tracked separately from product sales. In Shopify Admin, go to Analytics > Reports > Sales > Gift card sales. This shows how much you're generating from gift cards specifically. Track this monthly and look for patterns: which months perform best (likely Q4), which denominations sell most, and how promotional campaigns affect sales. Understanding your baseline helps you set realistic goals and measure improvement.

Redemption rates tell you how effective your re-engagement efforts are. Calculate: (number of gift cards redeemed / number of gift cards sold) x 100. A healthy redemption rate is 70-85%. Lower rates might indicate poor email delivery, confusing redemption process, or recipients who aren't interested in your products. Higher rates mean you're successfully driving recipients to your store. Track redemption timeframes too—how long does it typically take someone to use a gift card? This informs when to send reminder emails.

Average overage amount is your most important profitability metric. Calculate: (total revenue from orders using gift cards - gift card value applied) / number of gift card redemptions. If the average overage is $35, that means gift card recipients spend $35 more than their card value on average. This is pure incremental revenue. Track this monthly and test strategies to increase it: better product recommendations, free shipping thresholds, upsells at checkout. Even small improvements compound significantly.

Customer acquisition cost for gift card recipients shows efficiency. How much did it cost to acquire customers who came through gift cards? Factor in your gift card marketing spend (ads, promotions, email campaigns) divided by new customers acquired through gift card redemptions. Compare this to your paid advertising CAC. Gift card acquisition should be significantly lower—sometimes negative when factoring in immediate gift card revenue—making it one of your most efficient acquisition channels.

A/B Testing Gift Card Elements

Test different denomination options to find optimal pricing. Try offering 4 denominations vs 6, different dollar amounts ($40 vs $50), or removing custom amounts entirely. Track which setup generates higher average gift card value. Sometimes offering fewer options increases decision-making speed and average value. Sometimes custom amounts help customers give exactly what they want. Your audience is unique—test to find what works.

Email subject lines and creative heavily influence gift card campaign performance. A/B test different approaches: emotional ("Give the Gift of Joy"), practical ("Last-Minute Gift Solution"), or value-focused ("$100 Gift Card = $120 Value"). Test imagery too: lifestyle photos vs product shots vs illustrations. Small improvements in email open rates and click-through rates compound into significant revenue differences over time.

Landing page optimization can dramatically increase conversion rates. Test different headlines, value propositions, images, and CTA button copy on your gift card product page. Try adding customer testimonials from gift card buyers, showing redemption instructions upfront to reduce uncertainty, or featuring lifestyle imagery that represents the gifting experience. Even a 2-3% conversion rate improvement generates substantial additional revenue when applied to all your traffic.

Seasonal Performance Analysis

Year-over-year comparison helps identify growth opportunities. Compare Q4 2024 gift card sales to Q4 2025. Are you growing? By how much? If you're not seeing 20-30% year-over-year growth, there's opportunity. Analyze what changed: did you promote differently, offer new denominations, run different campaigns? Learn from successful periods and replicate those strategies.

Month-over-month tracking reveals patterns and opportunities. Gift card sales typically spike in December, November, May (Mother's Day), June (Father's Day/graduation), and February (Valentine's Day). But don't ignore other months—can you create reasons to buy gift cards in slower periods? "Back to School," "Anniversary Season," or "Just Because" campaigns can generate off-season revenue. Track monthly performance to identify these opportunities.

Campaign attribution shows which marketing efforts drive gift card sales. Use UTM parameters on all gift card links in emails, social media, and ads. Track which channels generate the most gift card revenue: is it email, paid ads, organic social, or on-site promotion? Double down on highest-performing channels and optimize or cut underperforming ones. Attribution helps you allocate marketing budget efficiently toward tactics that actually drive sales.

8. Common Mistakes to Avoid

Setting It and Forgetting It

The biggest mistake is enabling gift cards and doing nothing else. Most merchants activate the feature, add a basic product page, and never promote gift cards actively. This generates minimal sales—only people who actively search for gift cards will find them. Gift cards require active marketing just like any other product: dedicated campaigns, prominent site placement, regular promotion, and strategic positioning during gift-giving seasons. Treat gift cards as a core revenue driver, not a passive feature.

Poor Email Design and Unclear Instructions

A confusing gift card email kills redemption and damages brand perception. If the recipient can't easily find the code, doesn't understand how to use it, or finds the email ugly and generic, they won't redeem it. Worse, they'll have a negative first impression of your brand. Invest time in designing a beautiful, clear gift card email. Test it yourself—send yourself a gift card and go through the redemption process as if you're a first-time recipient. Fix any friction points immediately.

Not Promoting During Peak Seasons

Failing to capitalize on Q4 and major gift-giving holidays is leaving massive revenue on the table. If you're not actively promoting gift cards in November and December, you're missing your biggest opportunity. Start planning Q4 gift card campaigns in September: create dedicated creative, plan email sequences, set up paid ads, and design homepage promotions. The merchants who generate serious gift card revenue treat Q4 as a make-or-break season and promote accordingly.

No Re-engagement Strategy for Unredeemed Cards

Letting gift cards sit unredeemed means losing out on overage revenue and customer acquisition. Yes, unredeemed cards eventually become breakage revenue, but you're missing the bigger opportunity: converting that recipient into a customer who spends more than the card value and potentially becomes a repeat buyer. Implement automated re-engagement emails at 30, 60, and 90 days for unredeemed cards. A simple reminder can drive thousands in additional revenue from dormant cards.

Complicated Redemption Process

Any friction in the redemption process reduces usage and overage spending. If recipients have to hunt for where to enter the code, if it doesn't apply automatically, if there are restrictions they didn't expect, they'll get frustrated and spend less (or nothing). Make redemption obvious and effortless. The gift card code should work at checkout exactly like they expect. Test your redemption flow regularly and optimize for simplicity.

9. Legal and Compliance Considerations

Expiration Dates and Fees

Gift card regulations vary by country and region. In the United States, the CARD Act of 2009 requires gift cards to remain valid for at least five years from purchase or last reload. Fees (dormancy fees, service fees) are heavily restricted and can only be charged after 12 months of inactivity under specific conditions. Most merchants avoid expiration dates and fees entirely—it's simpler legally and better for customer experience. Check your local regulations before implementing expiration or fees.

In the European Union, gift card regulations vary by country. Some countries require minimum validity periods, others prohibit expiration entirely. If you sell to EU customers, research requirements for each market or keep it simple: no expiration dates, no fees, indefinite validity. This removes legal risk and improves customer satisfaction. Shopify gift cards can be set to never expire, which is the safest approach for most merchants.

Escheatment and Unclaimed Property Laws

Escheatment laws require businesses to report and remit unredeemed gift card balances to the state after a certain dormancy period (typically 3-5 years). This applies in most US states. You can't simply keep unredeemed gift card revenue forever—after the dormancy period, you must turn it over to the state's unclaimed property program. The state holds it until the consumer claims it. Work with an accountant familiar with escheatment laws to ensure compliance.

Revenue recognition for gift cards follows specific accounting rules. Generally, you can't recognize gift card sales as revenue immediately (even though you receive the cash). Revenue is recognized when the card is redeemed and you deliver goods or services. Unredeemed balances may eventually be recognized as breakage revenue, but this requires careful analysis of redemption patterns and compliance with accounting standards (ASC 606 in the US). Consult your accountant to ensure proper revenue recognition treatment.

Terms and Conditions

Clear gift card terms protect your business and set customer expectations. Include terms on your gift card product page covering: no cash value (in most jurisdictions), how to check balance, redemption process, whether they can be combined with other discounts, and what happens if the card is lost or stolen. Link to full terms from your gift card page. This prevents disputes and ensures customers understand how gift cards work before purchasing.

10. Getting Started: Your Gift Card Action Plan

Week 1: Setup and Foundation

Enable gift cards in Shopify and customize the product page. Write compelling copy explaining why your gift cards make perfect gifts. Add beautiful lifestyle images that communicate the gifting experience. Set up appropriate denominations based on your average order value. Customize the gift card email template to match your brand and include clear redemption instructions. Test the entire flow yourself—buy a gift card, receive it, redeem it, and optimize any friction points.

Week 2: On-Site Promotion

Add gift cards to your main navigation. Create a homepage banner promoting gift cards with compelling copy and a clear CTA. Add gift card links to your footer, consider an exit-intent popup, and ensure gift cards are visible throughout the customer journey. The goal is making sure anyone looking for a gift option can easily find gift cards. Make them impossible to miss.

Week 3: Email and Marketing Campaigns

Send a dedicated gift card campaign to your email list explaining the new offering and its benefits. Create segments: existing customers who might gift to friends, corporate buyers who might need bulk purchases, and anyone who's browsed gift-related content. Set up automated abandoned cart flows that mention gift cards as an alternative. Plan your next seasonal campaign (whatever holiday is approaching) with gift card creative.

Week 4: Paid Advertising and Optimization

Launch small-scale paid campaigns promoting gift cards on Facebook, Instagram, and Google. Test different creative and messaging to see what resonates. Allocate modest budget initially and scale what works. Set up conversion tracking to measure gift card sales from ads. Analyze your first month of data: how many gift cards sold, average denomination, which channels performed best, and redemption rates. Use these insights to optimize going forward.

Ongoing: Seasonal Campaigns and Optimization

Plan quarterly campaigns around major gift-giving holidays. Create a content calendar marking Mother's Day, Father's Day, graduation, back-to-school, Black Friday, and December holidays. Prepare creative and campaigns 4-6 weeks before each event. Between major seasons, test different promotional strategies: bonus value offers, bundling gift cards with products, or corporate outreach. Continuously optimize based on performance data. Track year-over-year growth and aim for 20-30% increases annually as you refine your gift card strategy.