The holiday season presents a golden opportunity for small and medium-sized businesses (SMBs) to increase revenue, strengthen customer relationships, and inject cash into their operations. One powerful yet often underutilized tool is gift cards. With the right approach, gift cards can do more than just drive sales; they can also increase brand visibility, foster customer loyalty, and create a financial cushion for the slower months.

In this article, we’ll discuss how SMBs can effectively incorporate gift cards into their holiday strategies.

Why Gift Cards Are a Holiday Must-Have for SMBs

The holiday season is the ideal time for SMBs to capitalize on increased consumer spending. Here’s why every SMB should make them a central part of their holiday strategy:

  • Increased Revenue Potential
    Gift cards provide SMBs with an upfront payment, giving businesses immediate cash flow before the products or services are even delivered. On top of that, studies show that customers often spend more than the value of the gift card when redeeming it. According to CapitalOneShopping.com, 61% of consumers exceed their gift card’s value during redemption, with an average of $31.75 in overspend. This means gift cards not only guarantee sales but can also lead to higher average transaction values.
  • Enhanced Brand Visibility
    When customers purchase gift cards, they become brand ambassadors by sharing your business with friends, family, or colleagues. Every time a gift card changes hands, it spreads awareness of your brand, extending your reach to potential new customers who may not have heard of your business before.
  • Customer Attraction and Retention
    Gift cards are a fantastic way to attract new customers. When recipients redeem their cards, they’re exposed to your offerings, potentially turning into loyal, repeat customers.

Key Benefits of Gift Cards for SMBs

Gift cards are more than just convenient gifts for customers—they’re a strategic tool that can deliver significant benefits to SMBs. Here’s how incorporating gift cards into your operations can have a lasting impact:

  • Liquidity Boost
    One of the biggest advantages of gift cards is that they provide immediate cash flow. Since gift cards are prepaid, businesses can benefit from an influx of funds before the product or service is even redeemed. This liquidity is especially valuable during the holidayseason, helping SMBs manage operational costs and prepare for the slower months that may follow.
  • Holiday Sales Optimization
    Gift cards can help drive more foot traffic to your physical location or more clicks to your online store. Customers who buy or redeem gift cards often make additional purchases, increasing overall sales.
  • Builds Customer Loyalty
    Gift cards act as an invitation for customers to return to your business. They create a positive experience for recipients, who often turn into repeat customers. Additionally, the convenience of gift cards fosters goodwill and strengthens your relationship with existing customers.
  • Low Marketing Costs
    Compared to other holiday promotions, gift cards are a cost-effective marketing tool. The design and distribution of gift cards require minimal resources, and their promotion can be easily integrated into existing marketing channels like social media, email campaigns, and in-store displays.
  • Reduces Chargebacks
    Unlike traditional transactions, gift card purchases are prepaid, eliminating the risk of disputed charges. This reduces the chances of chargebacks, which can be costly and time-consuming for SMBs to resolve.

Six Actionable Strategies to Maximize Gift Card Sales

Integrating gift cards into your holiday strategy is only part of the equation. To truly maximize their potential, SMBs must deploy creative and targeted approaches to boost sales. Here are actionable ways to ensure your gift card program succeeds this holiday season:

1. Offer Limited-Time Holiday Discounts

Encourage customers to purchase gift cards by offering exclusive, time-sensitive deals. Limited-time promotions create urgency and can significantly increase gift card sales during the holiday rush. For example: “Buy a $50 gift card, get a $10 bonus card for free.” and “Receive 15% off when you buy $100 or more in gift cards.”

    2. Bundle Gift Cards with Popular Products

    Add extra value by pairing gift cards with best-selling items or services.
    Examples include:

    • Offering a free sample or small product with every gift card purchase.
    • Bundling gift cards with holiday packages or experiences, such as spa treatments or meal deals.

    These bundles not only make the gift more appealing but also introduce recipients to other offerings in your business.

    3.Positioning Use Cases for Gift Cards

    Position gift cards as the perfect add-on to holiday gifts, as a great stocking stuffer, or as an easy solution for those “hard-to-shop-for” people. Use signage, social media posts, and email campaigns to promote them as versatile and thoughtful gift options.

    4. Leverage Social Media and Email Marketing

    Actively promote your gift cards across social platforms and email lists. Ideas include:

    • Posting countdowns to the holidays with reminders about your gift cards.
    • Highlighting customer testimonials or use cases for your gift cards.
    • Sending exclusive deals to email subscribers to incentivize early purchases.

    5. Partner with Local Businesses

    Collaborate with neighboring businesses to cross-promote each other’s gift cards. For instance, offer a discount on your gift cards with proof of purchase from a partnered business or create a holiday shopping guide featuring multiple businesses and their gift card deals.

    6. Engage Employees in the Promotion

    Your employees can be your best sales force for gift cards. Train your staff to recommend gift cards to customers, especially those unsure about what to purchase. Consider offering small incentives or bonuses for employees who sell the most gift cards.

    Post-Holiday Follow-Up and Retention

    The work doesn’t end when the holiday season wraps up. The true value of gift cards extends into the post-holiday months, offering an excellent opportunity for SMBs to retain customers, boost sales, and gather valuable insights. Here’s how to make the most of your gift card program after the holidays:

    Track Redemption Trends

    Gift cards offer a wealth of data about customer behavior. Monitor redemption rates and timing to understand customer preferences and shopping patterns. For example: Are gift cards redeemed soon after purchase or months later? And what items are most commonly bought with gift cards? This information can help refine future marketing and inventory strategies.

    Upsell and Cross-Sell Opportunities

    When customers redeem their gift cards, seize the opportunity to upsell or cross-sell by offering discounts on complementary products or services or provide exclusive deals for gift card holders, such as “Get 20% off your next purchase when you use your gift card today”. This approach not only increases the value of each transaction but also encourages additional visits.

    Encourage Gift Cards Year Round

    Position your gift cards as year-round gifts for birthdays, anniversaries, and other special occasions. Encourage satisfied customers to purchase gift cards for friends and family by offering discounts or bonus cards for repeat purchases or running “refer-a-friend” promotions tied to gift cards.

    Reconnect with Gift Card Customers

    Stay engaged with customers who redeem gift cards by sending thank-you emails after redemption, adding them to your loyalty or rewards program, and offering personalized deals based on their purchase history. By keeping these customers engaged, you can turn one-time buyers into long-term patrons.

    Leveraging Your POS System for Gift Card Management

    A modern point-of-sale (POS) system is essential for SMBs looking to streamline gift card operations. Here’s how it can enhance your program:

    • Create and Activate Cards: Easily set up physical or digital gift cards with customizable amounts and instant activation.
    • Track Balances and Redemptions: Monitor card usage, balances, and transaction history in real-time.
    • Enable Reloadable Cards: Allow customers to reload cards, fostering repeat business.
    • Simplify Employee Training: Intuitive systems make it easy for staff to manage activations, redemptions, and inquiries.
    • Analyze Data: Use built-in analytics to track sales, redemption trends, and promotion effectiveness.
    • Integrate with Other Tools: Sync with loyalty programs, email marketing, and e-commerce platforms for seamless operations.
    • Enhance Customer Experience: Offer smooth transactions with features like online balance checks and email receipts.

    A modern POS system ensures your gift card program is efficient, profitable, and easy to manage, providing both operational benefits and a better customer experience.

    Wrapping Up

    Gift cards are a powerful tool that SMBs can leverage to maximize revenue, enhance brand visibility, and strengthen customer loyalty during the holiday season and beyond. By implementing creative strategies, utilizing actionable insights, and leveraging technology like modern POS systems, businesses can create a seamless and impactful gift card program.


    Whether it’s driving immediate cash flow, encouraging repeat customers, or reducing chargebacks, gift cards offer a unique opportunity for SMBs to thrive in a competitive market. Start incorporating gift cards into your holiday strategy today to not only capitalize on seasonal spending but also build a sustainable foundation for long-term success.

    Ready to see how Clearent by Xplor can help your SMB get set up with gift cards?

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    by Clearent by Xplor

    • First published: December 05 2024

      Written by: Clearent by Xplor