Selling Gift Cards: 8 Gift Card Ideas for Small Businesses
Learn why, how and what types of gift cards you should sell through your online store, as well as ideas and inspiration.
Your customers probably have at least one friend or family member who has a hard time choosing a gift. This can make gift giving stressful. In this case, a gift card can be a great solution.
As a small business owner, offering gift cards is a time- and cost-effective way to solve a customer problem while increasing sales, building brand loyalty, and reaching new customers.
What is a gift card?
Gift cards (or gift certificates) are prepaid vouchers that can be used at certain offline stores or online stores. Gift cards are loaded with a certain amount of money at the time of purchase.
There are two types of gift cards:
- Physical Gift Cards : Physical gift cards are usually the size and shape of a credit card and fit neatly into a customer's wallet.
- Digital Gift Cards (or eGift Cards) : E-Gift Cards are digital tokens that work similarly to physical gift cards, but are sent via email or an app.
Gift cards often have an expiration date and are usually not reloadable. Once the card expires or the balance on the card is used up, it is no longer valid.
Benefits of Offering Gift Cards to Customers
Selling gift cards in your online store helps you manage your 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, the gift card is immediately credited, even if the gift card is not used for several months (which is often the case). Businesses can leverage this to promote gift cards during slow sales periods to generate an immediate cash inflow.
- Reach new customers : When you sell gift cards, you are essentially giving them as a referral. Since most customers give gift cards as gifts, the recipient has an economic incentive to visit your online store, and may even feel a sense of social obligation when a friend asks, “What did you buy?”
- Increased Sales : Have you ever used a $50 gift card to buy a $75 sweater? Gift cards drive customers into your store. Once they start browsing your online store, you have the opportunity to drive additional purchases and increase the size of your shopping cart.
- Build Brand Loyalty : Some companies offer a $50 gift card for $45 to encourage gift card purchases, or offer discount codes, credits, or loyalty program bonus points to gift card buyers. These incentives build brand loyalty, encourage repeat purchases, and serve as a reminder of the brand to both the gifter and the recipient.
8 Gift Card Ideas for Small Businesses
If you’ve decided to sell gift cards, what types of gift cards can you sell? Customers often look for gift cards in a specific category and then choose a brand they or their recipients know and love. Here are eight common categories you can offer gift cards in, along with some popular examples.
- Product Gift Card
- pet gift card
- Work and Service Gift Cards
- Donation Gift Card
- Arts & Crafts Gift Cards
- Subscription Service Gift Card
- Gift Basket Gift Card
- Gift Card for Class or Event
1. Product Gift Card
Product gift cards are the perfect gift for someone who loves a particular brand but is hesitant to spend money on it themselves. Or, if you want to promote a favorite brand but don’t know the recipient’s size or specific preferences, they’re a great choice. If you sell food, gift card buyers don’t have to worry about the recipient’s food preferences or allergies. By giving a product gift card, customers can introduce your brand without having to know the recipient’s exact size or color preferences.
For example, clothing brand Outdoor Voices sells activewear for everyday errands or outdoor activities. Recipients can use their gift cards to purchase a trendy workout dress, a warm hoodie, or a cool new pair of shoes.
2. Gift Cards for Pets
Pet care company Rowan sells gift cards for shampoos, conditioners, and even glitter and dye for pets. If your online store sells pet products, consider offering a gift card, which would be a perfect gift for your new pet friend.
3. Work and Service Gift Cards
Gift cards aren’t limited to physical products—giving a gift card for a task or service allows customers to give the gift of their time. Handy.com offers home cleaning, landscaping, furniture assembly, and even plumbing services through a network of highly rated, experienced providers. For example, Handy sells gift cards for a three-hour home cleaning or a two-hour furniture assembly service starting at $99.
4. Gift Cards for Donations
If you donate a portion of your profits, you can help customers support local (or global) causes by offering gift cards. For example, Darzah , a clothing and home goods company, donates 80% of its profits each month to create jobs for Palestinian women.
5. Arts & Crafts Gift Cards
Arts and crafts gift cards can help spread holiday joy or brighten a tough day. For example, Rainbow Vision sells art prints, and Silk & Willow offers hand-dyed items for weddings and special events.
6. Subscription Service Gift Card
Many online subscription businesses sell gift cards or allow customers to gift a three-month, six-month, or one-year subscription. The Pot Gang subscription gift helps the recipient grow an indoor herb garden, while the Cocofloss subscription gift offers fun bath products like banana daiquiris and passion fruit, as well as floss.
7. Gift Basket Gift Card
Offering gift cards that can be exchanged for gift baskets introduces your product line to someone who is familiar with your brand but has not tried all of your products. It also allows the gift giver to satisfy multiple preferences. You can create different packages based on scent themes for a bath or home goods brand, or a specific cuisine theme, such as Mediterranean food. Gift basket gift cards allow you to be creative and even include products from complementary brands.
8. Gift Card for Class or Event
Even if your e-commerce is selling products, offering classes or tutorials related to your inventory can help you attract new customers . Nonna Live sells L'Oro Della Nonna olive oil, but also offers in-person classes via Zoom. It's a way to reaffirm the Italian brand's deep roots in tradition. Buying ingredients to cook with the olive oil producer is more than just a purchase; it's an experience to create memories.
How to create a gift card
Creating a gift card is simple. You can sell them directly by following these three steps:
- Select a gift card type
- Choosing a Vendor and Designing Your Card
- Start ordering and selling gift cards
1. Select a gift card type
Decide whether to offer a physical gift card, an e-gift card, or both.
2. Choosing a Vendor and Designing Your Card
To distribute physical cards, choose a vendor to design your gift cards. You can choose a fully customized design or modify an existing design. Physical cards can be activated using the best POS system for your needs.
For e-gift cards, use an app like Gift Card Pro, Go Gift Cards, or Rise.ai, a gift card and loyalty program app.
3. Start ordering and selling gift cards
Order your cards and post them to your online store. Gift cards are loaded at the time of purchase, so you don’t need to specify the amount before ordering. Now you’re ready to sell your gift cards.
Gift Card Ideas FAQ
What's the best way to give gift cards to customers?
Offer gift cards that fit your customers’ needs. Consider offering both physical and e-gift card options, and offer custom denominations or sell cards at a variety of price points. If your cheapest gift card is $250, you may miss out on small sales opportunities.
Should I set a usage limit or expiration date on my gift card?
Federal law in the United States prohibits gift card issuers from setting an expiration date that is less than five years from the activation date and imposes limits on inactivity fees. Setting a five-year expiration date can help business owners ensure that the revenue they receive from gift card sales is no longer considered a liability to the business.
Should I restrict gift cards to be used online only or in-store only?
Most gift cards can be used both online and in-store. To build brand loyalty and attract new customers, make your gift cards available in both physical and digital stores.
Can gift cards only be used for certain products or for a certain amount?
A gift card is a form of payment. Like cash, checks, or credit cards, it can be used for any product or service offered by the issuing store.