How Gift Card Programs Drive Holiday Sales and Customer Growth

Holiday shoppers want gifts that are easy to buy, easy to deliver, and guaranteed to be appreciated. That’s exactly why gift card programs have become a go-to strategy for both consumers and retailers during the festive season.

According to the National Retail Federation (NRF), U.S. consumers were expected to spend $29.3 billion on gift cards during the 2025 holiday season, making them one of the most popular holiday gift purchases. This growing demand presents a valuable opportunity for businesses to boost seasonal revenue while attracting new customers.

Whether you’re running a WooCommerce store, an online marketplace, or a retail business, the right gift card program can help increase holiday sales, improve customer satisfaction, and encourage repeat purchases long after the festive season ends.

In this guide, we’ll explore how gift card programs can drive holiday revenue, the best types of gift card campaigns to run, and proven strategies to maximize their impact.

Why Do Gift Cards Matter So Much During the Holidays?

Gift card programs matter during the holidays because they solve one of the biggest gifting challenges: finding a gift that the recipient will actually want. For shoppers, they offer convenience and flexibility. For businesses, they generate immediate revenue and create future sales opportunities.

The demand for holiday gift cards continues to grow every year. And this isn’t just a short-term trend. Research from Blackhawk Network found that 56% of consumers purchased a gift card during the 2024 holiday season, an 8% increase over the previous year. The same study revealed that recipients received an average of $209 worth of gift cards, highlighting the growing role gift cards play in holiday spending.

Consumer behavior is also shifting toward flexibility and value. Blackhawk Network’s 2025 post-holiday research found that 71% of shoppers chose a gift card instead of a physical gift because of affordability concerns, while many used digital gift cards for last-minute gifting.

For retailers, these trends make gift card programs more than just a holiday offering. They have become a proven way to capture seasonal demand, attract new customers, and encourage additional spending when gift cards are redeemed.

What Makes Gift Cards a Smart Sales Strategy for Retailers?

Gift card programs help retailers generate immediate revenue, attract new customers, and increase average order value. Unlike discounts, they drive sales without directly reducing profit margins.

When a customer buys a gift card, the retailer receives payment upfront while the redemption happens later, improving cash flow. Gift cards also introduce new shoppers to the brand, since recipients often become first-time customers. Additionally, many gift card users spend more than the card’s value when redeeming it, creating extra revenue opportunities.

During the holiday season, gift card programs can also reduce return-related issues by giving recipients the freedom to choose products they actually want.

What Types of Gift Card Programs Work Best for Holiday Promotions?

The best holiday gift card programs combine digital and physical cards, promotional bonuses, and flexible redemption options. The right mix depends on your customers, products, and holiday campaign goals.

1. What is The Difference Between Digital and Physical Gift Cards?

Digital gift cards are ideal for online stores and last-minute shoppers because they can be delivered instantly through email. Physical gift cards work better when customers want something tangible to place inside a holiday card or gift box.

Offering both can cover different gifting preferences. In 2025, Fiserv reported that two-thirds of consumers favored digital gift cards,, showing the growing demand for digital gifting.

2. Bonus Gift Card Promotions

Bonus offers such as “Buy a $50 Gift Card, Get $10 Free” can make gift cards more attractive while encouraging customers to spend more upfront. These promotions can be especially effective around Black Friday, Cyber Monday, and other major holiday sales events.

Fiserv’s 2025 survey found that 51% of consumers engaged with bonus gift cards with purchase, highlighting the appeal of this promotional model.

3. What is The Difference Between Store Credit and Gift Cards?

Store-specific gift cards keep spending within your business and can encourage recipients to discover your products. Universal or multi-brand cards offer greater flexibility but give retailers less control over where the eventual spending happens.

For most eCommerce businesses, a branded store gift card program is the better choice because it combines gifting convenience with customer acquisition and future sales opportunities.

How Can You Design a Gift Card Campaign That Converts?

A high-converting gift card campaign combines timely promotions, attractive offers, and consistent communication across email and SMS. Start before major shopping events, then increase urgency as the holidays approach.

1. Time Your Campaign Around Key Shopping Moments

Start promoting Black Friday gift cards and Cyber Monday gift cards before the biggest shopping events, then continue with a Christmas gift card promotion throughout December for last-minute shoppers. This matters because 35% of consumers typically begin buying holiday gift cards in November, while 27% wait until December, according to TSG and Bank of America research. (TSG Payments)
For digital gift cards, emphasize instant delivery as Christmas approaches. This makes them an easy solution for shoppers who have run out of time to buy physical gifts.

2. Bundle Gift Cards With Products

Increase the appeal of your gift card programs by pairing cards with popular products or bonus offers. For example, “Buy a $50 gift card and get a $10 bonus” or “Get a $20 gift card when you spend $100.” These incentives can encourage higher-value purchases and give customers an additional reason to choose your store.

3. Promote Through Email and SMS

Use a gift card email campaign and gift card SMS marketing to reach shoppers at the right moment. Fiserv found that 61% of consumers consider email an effective way for merchants to educate them about gift card promotions, while 39% prefer text messages. (Carat)

Create targeted gift card promotional emails for early shoppers, Black Friday/Cyber Monday buyers, and last-minute shoppers. Keep the CTA simple, such as “Buy a Gift Card” or “Send an Instant Gift.”

When Should You Promote Your Holiday Gift Cards?

Start promoting your holiday gift cards before Black Friday, then increase visibility through Cyber Monday and December to capture both early and last-minute shoppers. Starting early gives customers time to plan, while December promotions can position digital gift cards as an instant gifting solution.

A simple timeline works well: October to early November for awareness, Black Friday and Cyber Monday for major promotional offers, and December for urgency-driven campaigns. Highlight benefits such as instant delivery, flexible amounts, and bonus offers as Christmas approaches.

Don’t stop promoting immediately after the holidays. Extend your gift card campaign into January to encourage recipients to redeem their cards and potentially spend beyond the card’s value.

How Do You Promote Gift Cards Effectively Across Channels?

Promote gift cards across multiple customer touchpoints, including social media, homepage banners, email, SMS, and checkout, so shoppers see the offer throughout their buying journey. Consistent messaging helps keep your gift card program visible during the busy holiday season.

Use social media posts and stories to showcase gift ideas, while homepage banners can immediately direct visitors to your gift card page. You can also add gift card suggestions at checkout or in the cart to capture shoppers who are already ready to purchase.

Don’t overlook influencer and referral marketing. Encourage creators, affiliates, or existing customers to share your gift cards with their audiences using unique referral codes or links. This can expand your reach while giving customers an additional reason to recommend your store.

How Can WP Swings Gift Card Plugin Help You Execute This Easily?

Gift Cards for WooCommerce plugin by WP Swings helps you create, customize, and manage holiday gift card programs directly from your WooCommerce store. It simplifies everything from gift card creation to delivery and redemption.

Key Features

• Custom Gift Cards: Add your own designs, custom amounts, messages, and recipient details.
• Scheduled Delivery: Let customers schedule gift cards for specific dates, perfect for holiday gifting.
• Digital & Physical Gift Cards: Offer customers flexible gifting options based on their preferences.
• Digital Downloadable Gift Cards: Enable customers to purchase and download gift cards instantly for convenient gifting.
• 20+ Gift Card Templates: Create festive and occasion-specific gift card designs.
• Automated Delivery: Automatically send gift cards to recipients through email.
• Quick Gift Redemption with QR/Barcodes: Simplify redemption with scannable QR codes and barcodes for a seamless checkout experience.
• Flexible Redemption: Allow customers to redeem gift cards toward purchases in your store.
• Gifting Portal for Redeem & Recharge: Provide a dedicated portal where users can redeem, manage, and recharge their gift cards.
• Group Gifting Feature: Allow multiple contributors to pool funds and purchase a gift card together. Group gifting has become one of the easiest ways to make special moments more meaningful.
• REST API Support: Integrate gift card functionality with third-party applications and custom workflows using REST APIs.
• Holiday Promotions: Use gift card offers and bonus incentives to support seasonal campaigns.

Why Use WP Swings Gift Cards Plugin for Holiday Campaigns?

With WP Swings Gift Cards, you get the features needed to run effective holiday gifting campaigns without relying on manual processes. From custom gift card designs, scheduled delivery, digital and physical gift cards, and group gifting to QR/barcode redemption and a gifting portal, the plugin makes holiday gifting more flexible and convenient for both you and your customers.

What Metrics Should You Track to Measure Gift Cards Success?

Track gift card redemption rate, average order value (AOV), and repeat purchase rate to understand whether your gift card program is generating real business value.

These metrics show not only how many cards are used, but also how much customers spend and whether they return.

• Redemption Rate: Measures the percentage of purchased gift cards that customers redeem. A higher rate indicates strong customer engagement with your offer.
• Average Order Value: Compare the average value of gift card purchases with the value customers spend when redeeming them. This helps identify whether recipients are spending beyond their gift card balance.
• Repeat Purchase Rate: Track how many gift card recipients make another purchase after their initial redemption. This shows whether your holiday campaign is turning gift recipients into returning customers.

You can also monitor total gift card sales, outstanding balances, and revenue generated from gift card redemptions to get a complete picture of campaign performance.

Conclusion

Gift card programs can turn holiday gifting into a revenue and customer acquisition opportunity for retailers. From generating upfront sales to attracting new customers and encouraging repeat purchases, gift cards offer value beyond the holiday season.

The key is to choose the right gift card format, promote it at the right time, and make purchasing and redemption as simple as possible. With the right strategy and tools, your WooCommerce store can use holiday gift cards to increase sales while giving customers a convenient gifting option.

Frequently Asked Questions (FAQ’s)

1. How can retailers use gift cards to acquire new customers?

Gift cards help retailers attract new customers by turning existing buyers into brand advocates. When someone receives a gift card, they are introduced to a store they may not have visited before.

Gift cards create a low-risk way for new shoppers to experience a brand. Existing customers purchase gift cards for friends, family, or colleagues, effectively referring new people to the business.

Since recipients already have purchasing power through the gift card, they are more likely to complete their first purchase. Many retailers also use promotional gift card campaigns, such as “Buy a $100 gift card and get a $10 bonus card,” to expand their customer base and increase brand awareness.

2. Can gift cards increase average order value?

Yes, gift cards often increase average order value because customers frequently spend more than the gift card’s balance. This leads to higher transaction amounts and additional revenue.

When shoppers redeem gift cards, they tend to add extra products to maximize the value of their purchase.

For example, if a customer has a $50 gift card and finds products worth $75, they are likely to pay the remaining $25 themselves. This behavior not only boosts average order value (AOV) but also encourages customers to explore more products, increasing overall sales opportunities.

3. Do gift card recipients typically spend more than the card value?

Yes, most gift card recipients spend beyond the card’s value during redemption. This behavior is known as gift card overspending.

Studies consistently show that gift card users often purchase additional items beyond their gift card balance. Since the initial amount is already covered, customers feel more comfortable spending extra money to buy premium products, larger quantities, or complementary items.

This overspending generates additional revenue while creating a more engaging shopping experience for recipients.

4. How can gift cards generate repeat purchases?

Gift cards encourage repeat purchases by bringing customers back to a store and creating opportunities for future engagement. A positive redemption experience often leads to ongoing customer relationships.

When customers redeem gift cards and enjoy their experience, they are more likely to return for future purchases.

Retailers can strengthen this effect by offering loyalty rewards, personalized recommendations, or follow-up discounts after redemption. Digital gift cards can also be integrated with email marketing campaigns, helping businesses stay connected with customers and encourage repeat visits.

5. Can gift cards help improve customer retention?

Yes, gift cards can improve customer retention by increasing customer engagement and encouraging repeat interactions with a brand. They help businesses stay top-of-mind for shoppers.

Gift cards provide multiple touchpoints throughout the customer journey—from purchase and delivery to redemption and follow-up marketing. Retailers can use gift card campaigns alongside loyalty programs to reward existing customers and incentivize future purchases.

Customers who have positive experiences using gift cards are more likely to develop long-term relationships with the brand, resulting in higher retention rates and customer lifetime value.

6. How can retailers use gift cards to drive post-holiday sales?

Retailers can use gift cards to extend holiday spending into the post-holiday season. Gift card redemptions often bring customers back after peak shopping periods. Many consumers receive gift cards during holidays and redeem them weeks later.

Retailers can capitalize on this by promoting new arrivals, clearance events, or exclusive post-holiday offers. Sending reminder emails, personalized product recommendations, and limited-time promotions can encourage gift card holders to make purchases after the holiday rush, helping maintain sales momentum during slower periods.

7. Can gift cards help retailers generate revenue during slower periods?

Yes, gift cards provide an immediate cash flow boost, even when purchases are redeemed later. They help businesses maintain revenue during seasonal slowdowns. Retailers can run special gift card promotions during off-peak periods to encourage purchases and generate upfront revenue.

Since gift cards are often redeemed at a later date, businesses benefit from immediate cash inflow while securing future customer visits. This strategy helps stabilize revenue, improve cash flow management, and create additional sales opportunities when customers return to redeem their gift cards.