Gift cards are a perfect way to solve a variety of gift-giving needs. Whether it’s a last-minute purchase, for a gift exchange, or the gift of flexibility to the recipient, gift cards provide options for both givers and receivers.
A gift card is a prepaid physical or digital card for customers to use on a future purchase, and the market for them is huge. Studies estimate the US gift card and incentive card market will reach $220.38 billion in 2026, growing to $300.73 billion by 2031.
As an ecommerce business owner, last-minute presents are one of many reasons to create gift cards. Distribute gift cards in loyalty programs or tricky customer service situations as a customer engagement and retention strategy. Plus, gift cards often incentivize higher purchase values.
Below, learn more about how to create gift cards for your business using Shopify, how they can benefit your business growth, and how to promote and use them.
Why create gift cards for your business?
Gift cards, also known as gift certificates, offer a variety of benefits for merchants, including:
Reach new customers
Customers who purchase gift cards for other people become brand ambassadors, introducing potential new customers to your company. Once someone redeems a gift card, you can engage them with marketing and sales strategies to drive repeat purchases, like product recommendations and access to VIP programs.
Increase order values
Selling gift cards can help you receive higher-value orders, especially during the holidays. The National Retail Federation (NRF) estimated total spending on gift cards to exceed $29 billion in 2025. This is good news for your business: Customers spend an extra 42%, on average, when they redeem a gift card, with 41% of shoppers using them to supplement a large purchase.
Boost customer loyalty and retention
Offering gift cards to loyal customers can be a great way to showcase your appreciation for them in a customer retention program. You can also use custom gift certificates as part of a customer retention strategy by offering them to existing customers who’ve lodged a complaint or had a negative experience with your brand, like a shipping delay, for example. Gift cards are also commonly used as an incentive to get valuable customer feedback, such as through a survey.
Reward loyalty everywhere customers shop
Only Shopify’s integrated loyalty apps let customers collect and redeem loyalty rewards when shopping with you both online and in store—no complicated workarounds required.
Explore loyalty apps
How gift cards work
Gift cards work by preloading money onto a physical or digital card (also known as e-gift cards.) They act as an IOU: businesses take the money upfront and let customers spend their credit on future purchases.
There are two types of gift cards you can accept:
Closed-loop gift cards
These cards are only available to buy and redeem at your store. They’re great for encouraging brand loyalty; shoppers can’t spend their credit elsewhere. Closed-loop cards also tend to have lower fees and a simpler setup process.
Open-loop gift cards
These card types are managed by gift card brands like Prezzee and Thankbox. They can also include prepaid cards offered by networks like Visa and Mastercard. Customers can spend their credit with any retailer who participates in the program.
How to create digital gift cards on Shopify
In the age of ecommerce, you don’t need to produce and ship physical gift cards. Digital gift cards function the same as their predecessor: Customers redeem them at checkout by entering their unique code.
Here’s how to create, edit, and track digital gift cards with Shopify:
How to create a new gift card
To create a new gift card, log in to your admin and navigate to Products > Gift cards. Click “Add a gift card product.”
Add a new gift card inside Shopify.
You’ll then need to input the following information, and click Save.
- Title: The name of the gift card—for example, “Holiday gift card” or “Birthday gift card.”
- Description: The descriptive text that appears on your gift card’s product page.
- Media: The image that represents your card up on the product page.
- Denominations: The gift card values customers can choose (up to a maximum of $2,000 or the equivalent in your local currency).
- Search engine listing preview: How your gift card product page appears in search engine results.
- Sales channels and apps: Which sales channels your gift card’s available on and when you want to publish your gift card.
- Organization: Optional sorting information including product type, category, and tags.
Add product details that appear on your gift card listing.
To make your gift card public and available for sale, click “View gift card products” and select the gift card you want to publish. In the Sales channels section, make the gift card product available in the sales channel(s) of your choice, then click “Save gift card product.”
Once published, people can buy gift cards on your website. Shoppers can add it to their cart and enter a gift card recipient name, custom message, and delivery method (email or SMS) at checkout.
How to update a gift card
Add or edit information about your gift card by navigating to the Product section of your Shopify admin and selecting “Gift cards,” then “View gift card products.” Choose the gift card you want to edit to view its product detail page, make your adjustments, and click Save.
Track gift cards from the Products tab inside your Shopify admin.
If you want to set expiration dates for existing gift cards, navigate to the Products > Gift cards (this is where sold gift cards appear). From here, navigate to the section with the code and date. Click the pencil icon, select “Gift cards expire,” make your changes, and save them. You can also manage expiration dates in bulk.
If you want to add a new denomination for your gift card, you’ll need to add a new variant of your gift card. That’s because each denomination is counted as a product variant.
💡 Tip: The 2009 CARD Act states retailers must make their gift cards valid for at least five years from the activation date.
How to track gift cards
Once you set up your gift card program, there are two big reasons to track them: to find out how many you’ve sold and to learn how customers are using them.
To see this information, navigate to Analytics > Finance Summary. Under Liabilities, you’ll see “Gift card sales” and “Gift cards outstanding balance.”
When you click on “Gift card sales,” you’ll see data about individual cards, like the date purchased, order number, and customer name. The gift cards’ outstanding balance will show you the total amount of money on gift cards.
To see a full list of your active gift cards, head to Products > Gift cards. Each gift card is tracked here, so you can see the customer’s information, their current balance, and when they purchased it.
Set time aside each month to track your gift card’s performance using KPIs like:
- Gift card redemption rate: The percentage of issued gift cards that’ve been used.
- Outstanding liability: The total dollar value of unredeemed gift certificates.
- Average overspend: How much the average customer spends above the gift card’s balance.
- Customer acquisition: How many new customers used a gift card on their first purchase.
- Channel performance: The breakdown of where customers spend their gift cards (online versus in-store).
Use these insights to spot trends and adjust your gift card strategy accordingly. If you have an excessive amount tied up in unredeemed cards, for example, give shoppers an incentive to spend them. You could apply a multiplier (for example, a $10 gift card now becomes $12 in store credit), or give out free samples on orders placed using a gift card.
Tip: Learn more about gift card reports in the Shopify Help Center.
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How to create physical gift cards with Shopify
Businesses with physical locations may want to create physical gift cards—provided your POS system lets customers pay with them.
Shopify’s customizable physical gift cards, for example, allow brick-and-mortar stores that use Shopify’s point-of-sale (POS) hardware to quickly create gift cards. Upload your own design or customize a template with your brand logo, colors, and store details.
When activated, you’ll scan the gift card’s barcode to redeem them at in-person checkouts. Customers can redeem them in your online store, too—they’ll just enter the card’s code at the online checkout.
How to create gift cards with third-party apps
If you want more features and functionality, install a paid third-party app from the Shopify App Store. For the best experience, look for apps labeled as Built for Shopify—a designation championing apps with Shopify’s high standards for usability, design, and performance.
Check out some top picks for third-party gift card apps below. Once downloaded, you’re free to integrate and access any of them directly in the Shopify admin:
- Gift Card Factory offers unique features, including balance reminders, scheduled emails, and bulk imports.
- GV lets you customize branded designs for your gift cards and gives customers the option to schedule when their gift cards will be sent to recipients. It’s useful for businesses that want recipients to receive cards on specific dates.
- GiftKart includes personalized gift card options, segment, or collection-specific options. It also offers features that increase sales and average order value, like offering free gift cards when customers meet a certain order threshold.
- Vify gives your customers the flexibility to check and adjust their gift card balances as needed. It also sends reminders when their gift card is about to expire, which creates a sense of urgency that can boost customer engagement.
Tips for using gift cards to drive sales and customer loyalty
Now that you know how to create and customize gift cards, here are a few tips on how to make the most of them.
Select the right gift card format for your customers
It should be easy for customers to buy and redeem gift cards. If you’re an online-only brand, opt for a digital gift card where the recipient can spend their store credit on your ecommerce website.
If you’re an omnichannel retailer with a physical location, consider hybrid gift cards. Customers can spend them on both sales channels.
Other things to consider include:
- Recipient experience. If you’re striving for a luxury customer experience, offer physical gift cards customers can wrap like a real gift.
- Timing. A last-minute shopper searching for a Mother’s Day gift doesn’t have time to mail a physical card. A digital version emailed with seconds can help you save the sale.
- Shipping fees. If your customers expect free delivery, you’ll have to absorb the cost of shipping a physical gift card, which can impact profit margins. Digital gift cards don’t have this issue—they’re virtually free to deliver.
Create a custom image for your gift cards
Whether you’re creating physical or digital gift cards, put time and effort into the design of your gift cards and the imagery that represents them. Incorporate your brand identity into your design. That includes matching your visual brand elements—like color palette, typography, and logo—to maintain brand consistency.
Even if you’re not a designer, you can quickly create a custom gift card design with a generative AI tool like:
- Canva Magic Design
- Adobe Express
- Google Nano Banana
If you’re selling digital gift cards on your website, you’ll also need product imagery for the gift card page. Here’s an example from the athleticwear brand Vuori.
The cover image for the company’s digital gift card, pictured on the card’s product page, mimics the design of a physical gift card. It features a sleek, grayscale design that’s in line with the company’s functional, minimalist brand identity.
It also includes a list of words (“Run,” “Surf,” “Hike,” “Train,” and “Chill”). These hint at what Vuori sells—apparel that’s as comfortable for running a marathon as it is for relaxation.
Vuori’s gift card matches its brand aesthetic. Source: Vuori
Design a branded delivery email
When a customer sends someone a digital gift card, it could be the recipient’s first touchpoint with your brand. Capitalize on this moment with a branded email marketing campaign that conveys your brand identity and gives the recipient everything they need.
It’’s best practice to include:
- The gift card code
- Balance amount
- Redemption instructions (for example, “Enter into the discount code field at checkout”)
- A call to action, such as “Shop Now”
- Customer service contact details in case they have questions
To make it clear that your email contains a digital gift card, consider showcasing your digital gift card’s cover image, like DÔEN does. It combines this with essential information like sender name, recipient name, and dollar amount, while communicating its classic Americana brand identity through a vintage-looking photo of a woman sitting in an old-timey restaurant.
DÔEN’s gift card delivery email is on-brand. Source: DÔEN
Offer gift cards in your loyalty program
One of the easiest ways to use gift cards to build customer loyalty is to incorporate them into your customer loyalty program. For example, you might offer members a small gift card on their birthdays, or allow them to earn points on purchases and exchange points for gift cards. If your business has a mobile app, take it a step further by making gift cards accessible there.
To help you stay within your budget, think about the number of people you have in your customer loyalty program and the gift card values you can comfortably provide to each of them.
Use them as referral prizes
Word-of-mouth marketing is one of the most effective ways to promote your business, but sometimes people need an extra push to recommend your products. This is where gift cards come into play.
“Whenever someone purchases from us, they’re going to get a post-purchase call from our customer service to thank the person and give them the opportunity to monetize a referral,” says Jeremiah Curvers, co-founder and CEO of Polysleep, in a Shopify Masters interview. “They could do that very easily using Friendbuy.”
“If they refer a friend and that email address is used, they’re going to get a $25 to $50 gift card through an application called Tremendous. Some people are just becoming so good at it that we push these people toward our affiliate program [and they earn] a percentage of the sales that are generated.”
You could even offer gift cards to new customers as a way to help brand ambassadors make sales. Heatonist, for example, gives both existing customers and their friends $10 store credit when referred.
Offer gift cards as a response to complaints
When a customer lodges a complaint, whether over email or phone, you’ll want to show them you value their voice and experience with your company. If you don’t, you’ll risk losing a customer. If you do, you can encourage brand loyalty.
Offering unhappy customers a gift card can help you show these buyers you care about what they have to say (and are willing to go above and beyond to make things right).
To make things consistent for customers and control your budget, set clear internal guidelines about when staff can offer gift cards. Explain the value they can offer. For example, you might default to a $10 gift card for an unhappy first-time shopper and $20 for a VIP buyer. The high-value customer has brought more money into your business to offset the higher gift card amount.
Protect against gift card fraud
Unfortunately not everyone who redeems a gift card will be a genuine customer. Gift cards are the most commonly reported payment method used in scams, with consumer losses totalling $198.8 million in the first three quarters of 2025 alone.
To prevent scammers from targeting your store:
Limit gift card purchases
Set a hard limit on how many gift cards can be bought in a single transaction—for example, five gift cards or $500 total—to prevent scammers from bulk buying.
Delay delivery for high-value cards
Some scammers use stolen credit card details to buy high-value gift cards and resell them before the actual cardholder recognizes the fraud and files a chargeback with their bank. Delays give cardholders extra time to pick up on these gift card transactions before you deliver the store credit.
Use AI fraud detection
Shopify’s Fraud analysis feature flags suspicious orders before you process them. You can verify, cancel, or refund orders that are high-risk, and use Shopify Protect to protect your business from fraudulent chargebacks on eligible orders.
Train retail staff on how to spot suspicious gift card usage
Buying multiple gift cards, using multiple denominations, and split payments across multiple cards are all red flags for gift card fraud. Educate your retail team on how to handle these scenarios at the checkout counter, and put processes in place to protect yourself. For example, require a manager’s approval for any gift card purchases over $100.
How to promote your gift cards
Now you’ve got your gift certificates up and running, here are gift card promotion ideas:
Create a social media contest
Maybe you’ve been tagged in an Instagram comment from a family member or friend trying to win a product, service, bundle, or gift—or maybe you’ve commented yourself.
Sometimes brands offer products in these campaigns, but you can easily execute these social media contests and giveaways with gift cards. To do this, offer a gift card of decent value—a lot more people will be interested in a $200 gift card than a $10 one—but make sure it’s within your budget.
After you promote the contest initially (you can use posts as well as stories), be sure to stay active on your social media channels to show customers you care about the contest and their experiences with it. If someone responds with a complaint, always reply. If someone reposts or comments on your post, consider giving it a like so they know you’re paying attention and appreciate their participation.
Tip: Reacting and commenting on social posts signals the algorithm that the post has strong engagement, so it’s likely to push it into more users’ feeds.
Take a seasonal approach
McKinsey reported gift cards were the top planned purchase for US consumers in the 2025 holiday season. Whether it’s a nearly forgotten token of appreciation for an acquaintance or in response to an unexpected present, digital options can make a great last-minute gift. Even if holiday shipping deadlines have passed, customers can receive them in time.
To encourage customers to make these seasonal purchases, try advertising your gift cards in your holiday gift guide, on your website, in your marketing emails, and on your social media profiles. Launch them around October to reach the third of holiday shoppers who start shopping for gifts around this time.
You can even create limited-time designs that center the holiday at hand, like MYKITCO did with this Christmas-themed digital gift card:
MYKITCO sells gift cards with Christmas designs. Source: MYKITCO
Discount your gift cards
One way to reward customers who support your brand is by giving them a discount on high-value gift cards. For example, you could offer a 10% discount on gift cards over $300, or you could add 10% of value to high gift card denominations. This can incentivize customers to make larger gift card purchases.
It can also be a nice way to thank the people who love your brand the most, and you might consider offering these discounts to your most loyal repeat customers. You can identify and email these buyers with the audience segmentation tools available in Shopify Messaging.
You might also create gift card discounts when you want to entice customers to spend money on your site. Create one discount to apply across all gift card denominations or discounts that apply to specific denominations or purchasing thresholds. You can do this easily with Shopify, which allows you to set percentage or dollar value discounts.
Tip: Opt for discount codes or automatic discounts instead of the Compare-at price field to discount gift cards.
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How to create gift cards for your business FAQ
How do digital gift cards work?
Digital gift cards work almost the same way physical gift cards do. A business creates a digital gift card and sets the denomination, then a customer purchases the card to redeem at a later date. To redeem digital gift cards, customers enter the card code in online checkout.
Are digital and physical gift cards interchangeable?
Digital and physical gift cards are interchangeable with Shopify. Customers can redeem physical gift cards online by entering the code on the back of the card. Customers can redeem digital gift cards in person when your business uses Shopify’s point-of-sale (POS) system.
What is the difference between closed-loop and open-loop gift cards?
Closed-loop gift cards can be redeemed only at the store the customer bought it from. Open loop gift cards, however, are managed by larger card networks. Customers can use them at any participating store.
Do gift cards expire?
You can customize whether your gift cards expire, but the 2009 CARD Act dictates that store credit must be valid for at least five years.
Can you make gift cards on Shopify?
Yes, you can make gift cards on Shopify. Shopify lets you create both digital and physical gift cards, which you can customize with your branding or use with Shopify’s templates.
