How to Set Up a Gift Card Program for Your Business

How Do I Set Up A Gift Card Program For My Business?

In the business world, the humble gift card has transformed from a simple present idea into a powerful revenue-generating tool that savvy business owners can't afford to ignore. These small pieces of plastic or digital codes have revolutionized how customers gift experiences, with over 75% of consumers purchasing at least one gift card annually and gift card sales exceeding $170 billion in recent years.

What makes gift cards particularly valuable for businesses is their remarkable capacity to create additional spending. Studies show that when customers redeem gift cards, they spend an average of 20% more than the card's value. Even more impressive, up to 20% of gift card value never gets redeemed, creating pure profit for businesses through what industry experts call "breakage."

Beyond the immediate financial benefits, a well-executed gift card program creates powerful marketing opportunities. All gift cards for business serve as a branded ambassador that travels beyond your existing customer base, introducing your business to potential new customers. Gift cards also significantly boost customer retention, with recipients frequently becoming repeat customers.

Types of Gift Cards: Physical vs. Digital

The first major decision when establishing your gift card program is whether to offer physical cards, digital cards, or both. Each option has distinct advantages that can align with different business models and customer preferences.

1. Physical Gift Cards

Traditional plastic gift cards continue to dominate the market, particularly for in-person shopping experiences. These tangible cards offer several key benefits:

• High perceived value as physical gifts that can be wrapped and presented

• Constant brand visibility when carried in wallets or displayed on refrigerators

• Professional appearance that enhances brand perception

• Ability to use custom designs that serve as mini-marketing tools

Gift card printing quality matters significantly with physical cards. High-quality cards with professional designs, vibrant colors, and durable materials (like the ones from DuraCard) not only represent your brand well but also reduce the risk of counterfeiting. Custom-shaped cards, specialty finishes like metallic elements, and premium packaging can further elevate the perceived value.

2. Digital Gift Cards

E-gift cards have surged in popularity, particularly among younger demographics and for last-minute gifts. These digital options provide unique advantages:

• Instant delivery via email or text message

• Zero shipping costs and environmental benefits

• Ability to purchase and send from anywhere at any time

• Easy tracking and management through digital systems

Many successful businesses now offer both physical and digital cards, creating maximum flexibility for customers and capturing sales across different shopping preferences and situations.

How To Set Up Your Gift Card Infrastructure?

Implementing a successful gift card program requires the right technological foundation. Here's what you need to establish before launching:

1. Point of Sale Integration

Most modern POS systems include built-in gift card functionality or offer it as an add-on feature. Your POS system should provide:

• Seamless card activation at the time of purchase

• Real-time balance-checking capabilities

• Transaction tracking for each gift card

• Reporting features to monitor program performance

Popular POS providers like Square, Clover, and Shopify offer robust gift card features that integrate directly with your existing payment processing systems.

2. Card Production and Management

For physical cards, you'll need to determine how they'll be produced and manage your inventory:

• Work with a professional gift card printing service to ensure quality and security features

• Order appropriate quantities based on projected sales (many businesses start with 250-500 cards)

• Establish secure storage protocols for unactivated cards

• Create a tracking system for card numbers and activation status

3. Online Integration

Even brick-and-mortar businesses should consider how gift cards function within their digital presence:

• Add gift card purchase options to your website

• Ensure online customers can check balances and make redemptions

• Create a system for delivering digital cards if offered

• Enable gift card redemption across all sales channels

How To Design Gift Cards That Drive Sales?

The visual appeal of your gift cards significantly impacts their effectiveness as marketing tools and their appeal as gifts. Here are key design considerations:

1. Brand Consistency

Your gift card should serve as an extension of your brand identity:

• Use your established color scheme, logo, and typography

• Maintain consistency with your other marketing materials and store aesthetics

• Consider how the design looks when photographed for social media

2. Strategic Design Elements

Beyond basic branding, thoughtful design features can enhance gift card effectiveness:

• Include clear space for the gift amount or denomination

• Ensure the card number and barcode are easily scannable

• Consider special finishes like spot UV, embossing, or metallic elements for premium appeal

• Design seasonal variants for holiday shopping periods when gift card sales peak

Many businesses find that working with professional designers who specialize in gift cards for business results in higher-performing cards that boost sales and strengthen brand perception.

Gift Card Policies and Procedures

Clear policies ensure your gift card program runs smoothly while protecting both your business and your customers:

1. Legal Compliance

Gift card regulations vary by location but generally include:

• Minimum expiration timeframes (typically 5 years in the U.S.)

• Disclosure requirements regarding fees and terms

• Specific accounting practices for tracking liability

Consult with a legal professional to ensure your program complies with all applicable laws in your jurisdiction.

2. Internal Policies

Develop clear operational guidelines addressing:

• Minimum and maximum card values

• Whether cards can be reloaded

• How to handle lost or stolen cards

• Staff training on card activation and redemption processes

Document these policies thoroughly and ensure all staff members understand the procedures before launching your program.

How to Market Your Gift Card Program?

Even the best gift card program won't succeed without effective promotion. Consider these strategies:

1. In-Store Promotion

Make your gift cards highly visible in your physical location:

• Create attractive display areas near checkout counters

• Train staff to mention gift card availability at appropriate moments

• Offer gift card packaging or greeting cards during the holiday seasons

2. Digital Marketing

Leverage your online presence to promote gift card sales:

• Feature these cards prominently on your website homepage during peak gift-giving seasons

• Create dedicated email campaigns highlighting your gift card program

• Share gift card information across social media platforms

• Consider paid digital advertising during the holiday shopping season

3. Special Promotions

Strategic promotions can significantly boost gift card sales:

• Offer bonus value (e.g., "Buy a $50 gift card, get a $10 bonus card")

• Create limited-time specialty designs for different seasons or events

• Bundle gift cards with complementary products or services

• Implement corporate gift card programs for local businesses

How to Track and Optimize Your Gift Card Program?

Once your program launches, ongoing management is essential for maximizing its benefits:

• Monitor key metrics like activation rates, redemption rates, and average purchase values

• Track when and how the cards are redeemed

• Analyze customer data to understand who buys gift cards and who receives them

• Use this information to refine your marketing strategies

Many businesses find that gift card purchasers and recipients represent distinct customer segments, each offering unique marketing opportunities.

Takeaway

Are you leaving money on the table by not offering gift cards to your customers? Duracard provides comprehensive gift card solutions designed specifically for growing businesses like yours. Our turnkey services include everything from premium gift card printing with custom designs and security features to complete program management systems that integrate seamlessly with your existing POS. 

Contact our gift card specialists for a free consultation and join the thousands of successful companies turning gift cards for business into powerful revenue engines and marketing tools.

FAQs

How much does it cost to set up a gift card program?

Startup costs vary based on your choices of physical cards, digital options, and POS integration. Basic digital-only programs can start around $200-$500, while comprehensive physical card programs typically range from $500-$2,500 for initial setup including card production, POS integration, and basic marketing materials.

How many gift cards should I order initially?

Most small to medium businesses start with 250-500 cards for their initial order. Consider your customer volume, seasonality, and how prominently you'll promote the program. It's better to start conservatively and reorder as needed rather than having excess inventory.

Can gift cards work for service-based businesses, not just retail?

Absolutely! Service businesses often see excellent results with gift cards as they introduce new clients to your services and typically result in appointments that might not have occurred otherwise. They're particularly effective for salons, spas, cleaning services, consultations, and experie