How to Grow Your Business with Gift Cards

Gift cards have become more than just a convenient gift option. They are now one of the most powerful tools businesses can use to drive revenue, increase customer engagement, and improve retention. Whether in the form of a physical card you pick up at the checkout counter or a digital gift card delivered instantly to your inbox, this simple product has evolved into a business strategy with proven impact.

In fact, the demand in the gift card market continues to rise steadily, with an average annual growth rate of around 10%. According to forecasts, global digital gift card sales are projected to reach nearly $700 billion by 2024. If you are a business owner looking to grow your brand, attract new customers, and strengthen your loyalty strategy, understanding how to maximize the potential of gift cards is essential.

The Magic of Gift Cards: A Win-Win Solution

Why are gift cards so effective? It comes down to the fact that they provide value to both businesses and customers simultaneously.

Instant Boost in Revenue
When customers buy gift cards, businesses gain immediate cash flow. This happens even before the card is used. In 2020, the National Retail Federation reported that consumers spent an average of $172.74 on gift cards, up from $163.16 in 2019. That increase demonstrates how strongly customers embrace gift cards as part of their shopping habits. For businesses, it’s essentially advanced payment—income secured upfront that can be reinvested into operations, marketing, or customer service.

Stronger Customer Connections
Gift cards naturally bring customers back. When a recipient visits your store to redeem their balance, that redemption often leads to additional purchases, cross-sells, or upsells. By encouraging repeat visits, gift cards contribute to stronger relationships and higher customer lifetime value.

Spreading the Word
A gift card doesn’t just bring back an existing customer—it introduces your brand to someone new. For example, when one person buys a $25 gift card for a friend’s birthday, that friend must visit your store to use it. This referral effect spreads awareness in an authentic, organic way without extra marketing costs.

Easy Insights into Customer Behavior
Every gift card transaction leaves a digital footprint. By monitoring purchase frequency, redemption rates, and spending habits, businesses can collect data that reveals customer preferences. These insights make it easier to fine-tune promotions, product offerings, and loyalty strategies.

By combining gift cards with your loyalty program, you can deliver a seamless experience—rewarding customers while learning more about what drives their engagement.

How to Maximize Gift Cards for Your Business

While simply offering gift cards is a strong starting point, the real benefits come from creating, executing, and optimizing a well-designed gift card strategy. Here are four proven ways to make gift cards work harder for your business.

1. Simplify Your Gift Card System

The first rule is convenience. Customers should be able to buy, redeem, and check balances without friction. For physical stores, this means keeping gift cards prominently displayed at the counter. For e-commerce or service-based businesses, a digital platform that allows for instant purchase and redemption is essential.

The smoother the process, the more likely customers are to use and recommend your gift card program.

2. Combine Gift Cards with Loyalty Rewards

Gift cards become even more powerful when tied to your loyalty program. For example, you can reward customers with points for purchasing a gift card or give them bonus credits when they redeem one. This dual incentive keeps them engaged and encourages repeat visits.

Integrating gift cards into your loyalty system also lets you track customer behavior more effectively. You can segment your audience based on purchase history, identify high-value customers, and tailor marketing campaigns with precision.

3. Spread the Word About Gift Cards

A gift card program is only successful if customers know it exists. Promote your gift cards across multiple channels—website banners, social media, email newsletters, and in-store signage. Highlight them during festive seasons or peak shopping times such as Christmas, Lunar New Year, or back-to-school campaigns.

By treating gift cards as a core offering rather than an afterthought, you’ll raise awareness and drive more sales.

4. Add a Personal Touch to Your Gift Cards

One way to make gift cards more appealing is to add customization or unique bundles. Some businesses create gift card packages that include special experiences, exclusive products, or seasonal themes. For example, a spa might sell a gift card bundled with a massage and facial package, while a restaurant could offer a “dining for two” experience.

These creative touches make gift cards feel like thoughtful, personalized gifts rather than generic vouchers.

Analyzing Your Gift Card Data

Launching a gift card program is just the beginning. To maximize results, businesses need to analyze how gift cards are performing and use the insights to refine future campaigns.

A comprehensive CRM or loyalty platform makes this process much easier. You can track redemption rates, monitor unspent balances (known as “breakage”), and calculate the average basket size of customers who use gift cards. For example, research shows that customers often spend more than the value of the card when redeeming, which increases your revenue per visit.

By segmenting data, you can identify which types of customers purchase gift cards most often, what occasions drive sales, and how gift card promotions impact retention. With these insights, you can design smarter campaigns that improve both customer experience and profitability.

Stay tuned for our upcoming blog, where we’ll break down the key metrics every business should track when running a gift card campaign.

Real-World Examples of Gift Card Success

Brands across industries have already demonstrated how effective gift card programs can be. Coffee chains like Starbucks use seasonal gift card designs to encourage purchases year-round, from Valentine’s Day to Christmas. Retail giants like Amazon and Target dominate the digital gift card market by offering easy purchase and instant delivery online. Even local F&B businesses benefit by offering gift cards that appeal to loyal regulars and introduce the brand to new diners.

These examples show that gift cards aren’t just for big brands. Small and mid-sized businesses can implement them too, often with even greater impact on customer loyalty and engagement.

The Future of Gift Cards: Digital and Beyond

As digital payments become the norm, digital gift cards will only grow in popularity. They’re easier to distribute, more secure, and integrate seamlessly with mobile wallets and apps. Looking ahead, businesses can expect even more innovation—personalized designs, integration with mobile loyalty programs, and even AI-driven recommendations for gift card offers.

The takeaway is simple: businesses that embrace digital gift cards now will be better positioned to engage modern, tech-savvy consumers in the future.

Why Gift Cards Should Be Part of Your Growth Strategy

The power of gift cards lies in their versatility. They generate immediate revenue, strengthen customer relationships, attract new buyers, and provide invaluable data for decision-making. When combined with loyalty programs, they become even more effective in driving engagement and retention.

Whether you run a retail store, restaurant, spa, or e-commerce business, implementing a gift card program is one of the simplest yet most impactful steps you can take to grow your business.

At Eber, we help brands launch and manage digital and physical gift card programs seamlessly through our all-in-one loyalty CRM software. From setup to data tracking, our platform makes it easy for you to maximize the potential of gift cards while enhancing customer experience.

👉 Curious about how a gift card program could benefit your business? Talk to us today!