How to Boost Gift Cards this Holiday Season

By Laura Kluz | Oct 26, 2018
  • Gift cards are the #1 most requested gift during the holidays.

  • US shoppers are projected to spend $160 billion on gift cards in 2018.

  • In 2016, 75% of gift card recipients spent nearly $28 more than the value of the card.

Ever wondered what the number one requested holiday gift in America is? It’s the no-brainer of gift-giving, and the saving grace of last-minute, panicked shoppers.

It’s gift cards!

Not only do gift cards allow shoppers to take the guesswork out of gift-giving, but they allow the recipient to buy anything their heart desires.

What does this mean for merchants?

By the end of 2018, US shoppers are projected to spend $160 billion on gift cards. And the majority of those sales will happen in the 4th quarter.

Gift card sales in the US have grown steadily since 2010, and that trend is expected to continue as online shopping and digital gift cards become more popular. Since 2015, nearly 93% of American consumers have either given or sent a gift card. With numbers like those, it’s important that your business offers some type of gift card program.

Gift Card Spending

A 2017 annual holiday spending survey found that gift cards are the most sought-after gift during the holidays, with 61% of customers marking them as #1 on their wish list!

It’s easy to see why gift cards are so popular: they let customers decide for themselves what they want as their gift (and there isn’t too much thinking involved for the gift card buyers).

Gift Card Spending

Gift cards aren’t just an easy escape for shoppers looking for a perfect gift, they’re also a powerful marketing tool for merchants.

They are extremely valuable for new customer acquisition and retention:

  • 41% of gift card recipients visit a new store because of a gift card
  • 72% of gift card recipients make a return trip to that store!
  • In 2016, 75 percent of gift card recipients spent nearly $28 more than the value of the card (up from 69 percent the previous year).

In other words, gift cards introduce you to new customers, increase your revenue, drive traffic to your site and encourage customer loyalty!

What gift cards mean for shoppers

Aside from the revenue gift cards drive for merchants, let’s take a look at the benefits for shoppers:

  • They provide gift options at any price point.
  • Rewards: many merchants offer incentives to encourage gift cards (think 15% off next purchase when you buy a gift card).
  • Since most stores offer e-gift cards, they’re literally available at the last minute!

Holiday Gift Cards Reason to Buy

Yes, there are different kinds of gift cards!

There are two types of gift cards to offer: physical cards or digital gift cards, which are typically sent via email.

For ecommerce merchants, e-gift cards are especially important as you get closer to the holiday itself - they are nearly instant (shoppers can purchase them even on Christmas morning!) and are easy to send via email.

If you need another reason to get on board the e-gift card bandwagon, they are growing at a rate of 200%! (whereas physical gift cards are growing at a rate of 5 to 6%.)

The rise of ecommerce and digital wallets are partially responsible for this growing trend; it’s now easier than ever to keep track of gift cards and redeem them online (this is especially appealing to younger demographics who store everything on their smartphones).

They are very easy to set up and Shopify offers options for both digital and physical gift cards.  

Be sure to get creative, and offer designs that are relevant to the season.

Kylie Cosmetics Gift Cards

When offering digital gift cards, be sure to detail exactly how it works on the product page, so shoppers are aware of what the recipient will receive. Velour Lashes’ product page clearly outlines what happens next once the shopper purchases a gift card:

Velour Lashes Gift Card

How to promote gift cards for the holidays

Marketing is more important than ever during the holidays, and gift cards should be included in your plan.

Right now, you’re probably using email marketing to build up some hype around your Black Friday, Cyber Monday sales coming up (and if you’re not, you should be!). Add an email to the sequence to call out gift cards this holiday season.

In the email, be sure to highlight the benefits of a gift card, as well as any extra incentives you may be holding. For example, It’s All Wild offered a special 50% discount for gift card holders in 2017, which was announced later in the month.

It's All Wild

Also, be sure to send another email closer to the holiday itself - it’ll keep gift cards on the radar of last-minute, panicked shoppers.

Here are some additional tactics you can use to drive holiday gift card sales:

  • Stocking Stuffer promotion: Gift cards make great “Stocking Stuffers” and are an easy item to upsell in cart, email or other promotions during the holiday season!

  • Make sure gift cards are easily findable on your site: many sites add Gift Cards to their navigation or their site wide header during the holidays.

    Amazon Gift Cards in Navigation

  • Upsell gift cards on your cart page: Gift cards are a great impulse buy during the holidays, and adding them to your cart may be the reminder a customer needs to purchase one for someone else on their shopping list.

  • Tie them into a promotion: e.g. Spend $100, get a $20 gift card. 
    Gift cards are also a great way to push items that you might not want to provide a dollar or percent discount on due to MAP or other pricing constraints.

    Target Gift Card Promotion

  • Remind your customers there’s still time to buy a gift: Once your shipping cutoff date passes, focus your promotional messaging on gift cards as the perfect last-minute gift.

  • Track the balance: Allow users to check the value and remaining balance of their gift card on your site.

    Whole Foods Gift Card Balance

What happens when the holidays are over?

Gift cards are a valuable way to continue sales momentum once the holiday season has wrapped up. On average, customers spend nearly 40% more than the value of their gift card while shopping!

Not to mention 90% of gift cards are redeemed within 60 days of receiving them - covering up for a slow January.

It’s also good to keep in mind that Christmas and Hanukkah aren’t the only holidays worth pouring your gift card marketing efforts into. Take a look at these other stats:

  • 81% of shoppers prefer to buy a gift card for a birthday
  • 38% of adults give a gift card as a graduation present
  • Parents request gift cards as the #1 gift for Father’s Day and Mother’s Day
  • 12% of shoppers buy gift cards as a wedding present
  • 83% of corporations use gift cards as employee incentives

As you can see, gift cards extend well beyond the holiday season! Although they peak during the fourth quarter, you should make them available to customers and keep the designs fresh year-round.

Laura Kluz

Laura Kluz

Laura Kluz is a digital marketer at Fuel Made who specializes in the world of ecommerce. She's a Canadian who loves making maple syrup, trail running in the mountains and baking cookies at least once a week.