Gift cards represent a significant revenue opportunity for Shopify businesses to optimize their sales funnel and increase customer lifetime value. In this blog, you’ll discover a comprehensive guide on how to use Shopify gift cards to boost your average order value and enhance the customer experience.
Why Gift Cards Work for Your Shopify Store
Gift cards offer immediate cash flow while encouraging future purchases and improving customer retention. Here’s why they’re such an effective conversion strategy:
- Increase average order value (AOV): When customers purchase Shopify gift cards, they receive payment upfront, which encourages repeat purchases.
- Powerful customer acquisition tool: New shoppers often spend more than the gift card value, increasing your average order value.
- Reduced return rates: Gift cards eliminate sizing and preference issues that plague physical gifts. Recipients choose precisely what they want, leading to higher satisfaction rates.
For example, statistics show that 64% of gift card purchases occur during the Christmas and holiday seasons. It demonstrates how effectively these digital products boost sales during peak shopping periods and optimize the sales funnel.
Now that you understand why gift cards work, let’s implement them in your store. The setup process is straightforward and takes less than 10 minutes.
How to Use Shopify Gift Cards: Two Approaches
Setting up gift cards in your Shopify store is straightforward. Navigate to your Shopify admin panel. Go to Products > Gift Cards. You’ll see two options in the dashboard:
- Add gift card product: Create gift card products that customers can purchase directly from your store. Perfect for store sales, allowing customers to buy gifts for others.
- Create gift cards: Create specific gift cards to send directly to individual customers. Ideal for apologies, loyalty rewards, or customer service situations.
Navigate to the Gift Cards section in your Shopify admin to create or manage gift card products.
Let’s begin with how to implement the Add gift card product option on your Shopify store.
Option 1: Add gift card product
Step 1: Configure basic information
- Enter your gift card name (e.g., “AOV’s Boutique Gift Card”).
- Write a compelling description (e.g., “The perfect gift for any occasion!”).
Create compelling copy that highlights your gift card as the perfect choice for any occasion.
Step 2: Design your gift card
- Upload a custom gift card design that reflects your brand identity.
- Ensure the image aligns with your overall brand aesthetic for consistent user experience.
Add custom visuals of your gift cards for better brand alignment.
Step 3: Set your gift card value (Denominations)
- Choose strategic preset amounts ($25, $50, $100, $200).
- Consider offering custom amount options to maximize purchase flexibility.
Pro tip: Create tiered pricing to encourage higher purchases and improve conversion rates. Since most customers select the middle option, strategically place your target amount in this position to optimize revenue.
Set predefined gift card amounts to give customers flexible options at checkout.
Step 4: SEO-optimize for better display
- Add an SEO-friendly title and description.
- Include relevant keywords, such as gift card and your store name.
Customize your gift card’s search appearance to improve click-through rates from Google.
Step 5: Set additional features
- Set status to Active (or Draft if you want to test first).
- Add product tags for better organization and searchability within your store.
Set your gift card product to active, organize it with tags, and choose where it’s published.
Step 6: Launch and test
- Click Save to activate.
- Preview the gift card page to ensure it displays correctly.
- Complete a test purchase to verify the entire flow.
That covers setting up gift cards as products for sale in your e-commerce store. Now let’s explore the second approach: creating gift cards for specific customer segments.
Option 2: Create gift cards for specific customers
Step 1: Create the gift card
- Enter a memorable code name (e.g., “reward-2025”).
- Set the initial value based on your campaign goals (e.g., $10).
Quickly generate a new Shopify gift card and configure its value and validity.
Step 2: Set expiration strategy
- Choose an appropriate expiration date that aligns with your marketing objectives.
- Consider 30-90 days for promotional cards to create urgency.
Pro tip: Shorter expiration periods (30 days) create urgency that drives faster redemption, while extended periods (90 days) demonstrate customer goodwill and enhance the shopping experience.
Step 3: Select recipients
- Choose from your existing customer list using segmentation criteria.
- Or enter new customer details manually for targeted acquisition campaigns.
Before issuing a gift card, create or select the customer who will receive it.
Step 4: Customize the message
- Write a personalized message explaining the gift and its value.
- Include clear redemption instructions to optimize the user experience.
Step 5: Send and track
- Review email/SMS details carefully.
- Send a test to yourself first.
- Click Send to deliver the gift card.
Preview and customize the gift card email before sending it directly to your customer’s inbox.
Note: Template customization requires HTML knowledge for advanced styling. Consider hiring a developer if you’re not comfortable with code modifications.
If you’re interested in exploring other methods to boost AOV on your Shopify store, here’s how to set up a free gift-with-purchase promotion on Shopify.
With your gift cards configured for optimal conversion, let’s address the most common setup mistakes that can undermine the success of your program.
3 Common Gift Card Implementation Mistakes and How to Avoid Them
Even with a perfect technical setup, many merchants encounter common challenges in the customer journey. Learn from these practical examples to maximize your program’s conversion potential:
1. Not promoting gift cards effectively
Many store owners simply add gift cards without marketing them. For example, a jewelry store owner added gift cards to their product collection but buried them on page 3 of their category listings.
Solution: Move gift cards to your homepage navigation and create a dedicated “Perfect Gift” banner to increase visibility throughout the shopping experience. Incorporate gift cards into your email marketing campaigns and highlight them during peak gift-giving seasons.
2. Limiting payment options
Limiting payment options for Shopify gift cards can negatively impact sales and make it more difficult for customers to make purchases. For example, a fitness equipment store only accepted credit cards, which excluded debit or online banking payments.
Solution: Accept all primary payment methods, including credit cards, PayPal, digital wallets, and buy-now-pay-later options to maximize accessibility and improve conversion rates at checkout.
3. Poor redemption experience
Make it easy for customers to use Shopify gift cards online. Let’s imagine a skincare brand sent emails that only included the code without explicit instructions. This confusion led to abandoned carts and frustrated customers throughout the shopping experience.
Solution: Include a step-by-step guide on how to redeem gift cards in all communications, and ensure the checkout process indicates where and how to enter gift card codes. Consider creating a dedicated FAQ section for gift card redemption to enhance user experience.
3 Strategic Tips to Optimize Your Shopify Gift Cards
Successful merchants implement these proven optimization strategies to enhance customer engagement and increase revenue. Let’s explore how to elevate your gift card program with these effective conversion tactics:
3 strategic tips to optimize your Shopify gift cards.
1. Create strategic promotions
Compelling incentives during peak shopping periods maximize gift card sales and conversion rates. These promotions can have a significant impact on both immediate revenue and future customer engagement.
Implementation example:
- Offer a $10 bonus credit for every $50 gift card purchased during holiday seasons.
- Run limited-time “Buy $100, get $120 value” promotions during traditionally slow periods.
- Bundle gift cards with popular products at checkout to increase average order value.
- Create flash sales on gift cards during peak shopping times to drive urgency.
2. Implement smart expiration policies
You can implement strategic balance alerts to encourage redemption and maintain customer engagement throughout the shopping journey. For example:
- Send balance reminder emails after 30 days of inactivity.
- Include gift card balance in order confirmation emails.
- Create “complete your purchase” campaigns for partial redemptions.
- Offer small bonuses for complete gift card redemption.
3. Track and analyze performance
You should monitor key gift card metrics, including sales trends, redemption rates, and customer behaviors. Utilize Shopify’s analytics dashboard to identify trends and refine your gift card strategy, ultimately enhancing revenue and customer loyalty.
Implementation example:
- Gift card sales by denomination to identify customer preferences.
- Redemption rates are segmented by customer type and acquisition source.
- Time elapsed between purchase and redemption to inform marketing timing.
- Average overspend amount per redemption to calculate true program ROI.
By using these strategies and tracking their impact on sales, you can improve your gift card program’s short-term sales and long-term customer loyalty.
Conclusion
Gift cards are a valuable but often overlooked revenue source for Shopify stores. With the market expected to reach $2.31 trillion by 2030, it’s an ideal time to launch a gift card program that boosts sales and keeps customers coming back, as outlined in this guide.
FAQs for Shopify Gift Cards: Everything You Need to Know
Customers can purchase gift cards directly from your store’s gift card product page. The process is identical to buying any other product:
- Browse available denominations or enter custom amounts (if enabled).
- Add to cart and proceed through the regular checkout process.
- Select your preferred delivery options: immediate email, scheduled delivery, or a specific recipient.
- Complete payment using any accepted payment method.
Pro tip: Enhance the shopping experience by making gift cards easy to find. Add them to your main navigation menu and feature them prominently during gift-giving seasons.
For merchants:
- Log into Shopify Admin > Products > Gift Cards.
- Search by gift card code or customer email.
- View complete details: remaining balance, original value, usage history.
For customers:
- Gift card balance displays automatically during checkout.
- Customers can contact your support team for balance inquiries.
- Consider adding a self-service balance checker to your website.
No, Shopify gift cards are store-specific digital products that can only be redeemed at the issuing store within your e-commerce ecosystem. They cannot be:
- Used at other Shopify stores or retail locations
- Converted to cash or transferred to other accounts
- Transferred between different online stores
However, customers can use gift cards for any item in your store, including sale products and subscription purchases.
