How a Gift Card Program Can Help Your Small Business This Holiday Season

Holiday shopping puts retailers in an interesting position. Shoppers are ready to spend, gift lists are getting longer, and the pressure to find the right present is real. Sometimes, the perfect gift is a product someone has been eyeing for months. Other times, it’s a gift card that lets them pick something for themselves.

Gift cards can be a practical choice for holiday shoppers, especially those trying to stick to a budget. In fact, Blackhawk Network’s 2026 holiday shopping study found that 93% of shoppers are setting a holiday budget plan to buy gift cards.

For small businesses, gift card programs give customers another way to shop while helping recipients discover their products and services.

Think about a customer who knows their friend loves your products but isn’t sure which one to choose. Or someone shopping online at 11 p.m., trying to cross one last name off their list. A gift card gives both shoppers an easy way to buy from your business without having to choose a specific product.

In this post, we’ll look at how gift card programs work, why they can be a good fit for the holiday season, and how to choose, launch, and manage a program that works for your business. We’ll also look at a few common mistakes to watch out for and how to tell if your program is working.

Key Takeaways

• Give holiday shoppers another option: Gift cards make it easier for customers to find a present when they’re unsure what to buy.
• Reach more customers: Recipients may discover your business for the first time when they redeem a gift card.
• Choose the right format: Physical gift cards, eGift cards, or both can help you accommodate different shopping preferences.
• Get the details in place before launch: Check point-of-sale (POS) compatibility, redemption options, program rules, and employee training before promoting your gift cards.
• Track results beyond the holidays: Gift card sales, redemptions, and post-holiday shopping activity can help you evaluate your program and plan for the future.

What Is a Gift Card Program for Small Businesses?

A gift card program lets customers pay upfront for a set amount that someone else can spend at your business. The customer pays for the card upfront, and the recipient uses its balance toward eligible purchases.

Gift cards typically come in two forms:

• Physical gift cards: The familiar plastic cards customers can buy at your register and tuck into a holiday card or gift bag.
• eGift cards: Digital cards customers purchase online and send electronically, often by email or text, depending on the program.

Each option serves a different shopping moment. Physical cards work well for customers already browsing your store, while eGift cards appeal to shoppers who want to send a gift without making another stop.

You can also offer both. And if your gift card system supports online and in-store redemption, the experience doesn’t have to stop at the channel where the card was purchased. Someone could buy a physical card in-store for a recipient who prefers shopping online or send an eGift card to someone who’d rather browse your shelves in person.

For retailers, that opens up more ways to sell. For customers, it means fewer restrictions on how they shop.

Fun Fact: Remember Blockbuster? It Helped Popularize Gift Cards

Gift cards may feel like a modern shopping staple, but they have a history that goes back decades. According to Smithsonian Magazine, Neiman Marcus first sold gift cards in 1994, but Blockbuster was the first retailer to display them in its stores. The idea reportedly came about as a way to deal with counterfeit paper gift certificates.

Why the Holidays Are the Best Time to Launch a Gift Card Program

Gift cards can make sense year-round, but the holiday season gives them a particularly useful role. Shoppers are buying for more people, working against tighter deadlines, and looking for gifts that won’t require a second guess.

Here’s where a gift card program can earn its place in your holiday plans:

Holiday Shoppers Are Already Looking for Gift Ideas

Some gifts are easy to buy. Others involve a lot of guesswork. Does the person already own it? Will they like the color? Is it the right size? And if you’re buying for someone whose tastes you don’t know very well, the list of questions gets longer.

Gift cards sidestep that guessing game. Customers can give someone the chance to choose their own products while keeping the purchase connected to your business.

That’s particularly useful for retailers with products customers enjoy exploring for themselves. Rather than trying to predict what someone wants, the gift giver can introduce them to your store and let them take it from there.

Capture Last-Minute Holiday Shoppers

The closer the holidays get, the less time some shoppers have to find a gift. Shipping deadlines pass, store shelves get picked over, and a quick, convenient option starts looking pretty appealing.

A physical gift card gives shoppers something they can purchase at the register and take with them. An eGift card offers another route: buy it online and send it electronically, without worrying about delivery.

If you offer both, you can accommodate shoppers who plan weeks ahead and those still working through their lists at the eleventh hour. That’s one less reason for a customer to look elsewhere.

Turn Holiday Gift Purchases into Future Store Visits

Here’s something worth considering: the person buying the gift card isn’t always the person who ends up shopping with you.

A customer might purchase a card for a friend who has never visited your store. That friend comes in to redeem it, discovers a product they like, and now has a reason to return. The original purchase has introduced your business to someone new.

Of course, one visit doesn’t guarantee a loyal customer. But gift cards create an opening that you might not otherwise have had. A welcoming store experience, helpful service, and products worth coming back for can help turn that first visit into something more.

Take Advantage of Increased Seasonal Spending

Gift cards give shoppers another way to direct their holiday budgets toward your business. They can also create opportunities for additional purchases when recipients redeem their cards.

Say someone receives a $25 gift card but finds $40 worth of products they’d like to buy. They can put the card toward the purchase and pay the remaining $15 themselves.

Not every customer will spend beyond the card’s value, and that’s fine. The bigger point is that gift cards bring people into your store or onto your website with a reason to shop. What they discover from there is part of the experience you get to shape. From there, the products they discover and the experience they have can help shape whether they return.

Boost Customer Engagement

Gift cards can also give you another reason to connect with customers throughout the holiday season. You can feature them in holiday emails, highlight them on social media, or include them in seasonal promotions. These reminders help keep your business in front of shoppers while they’re deciding where to buy gifts.

You can also pair gift cards with other holiday offers or rewards to give customers another reason to engage with your business. The key is to make gift cards visible and easy to purchase, whether customers are shopping in-store or browsing your website.

Bring New Customers Through the Door

A gift card can travel further than the original sale. When your regular customers buy cards for friends, family members, or coworkers, they’re also giving those people a reason to check out your business.

That kind of introduction can be valuable for a small retailer. Someone who wouldn’t have thought to visit your store might now have a gift card in hand and a reason to see what you offer.

You can give the program a push, too. Feature gift cards on your website, mention them in holiday emails, post about them on social media, and make sure shoppers can spot them in-store.

The more visible your gift cards are, the easier it is for customers to remember them when shopping for holiday gifts. For more ideas, explore these ways to promote your gift cards.

How to Launch a Gift Card Program Before the Holidays

You’ve decided gift cards could work for your business. Now comes the practical part: getting the program ready without adding unnecessary complications to an already busy season.

Choose Between Physical or eGift Cards

Think about how your customers like to shop. Do they usually stop by your store, shop online, or do a bit of both? That can help you decide which types of gift cards make the most sense for your business.

Physical gift cards give customers something they can wrap up and hand to someone, while eGift cards are great when they want to send a present without making a trip to the store. Offering both gives shoppers more ways to buy, as long as your system supports each option.

And don’t forget about how customers will use those cards. Ideally, someone could buy a gift card online and redeem it in-store or purchase one at your store and use it online. Just make sure your system supports those options before you start promoting them.

If you decide to offer physical gift cards, consider how custom gift cards can reflect your brand and give customers something that feels personal to your business.

Decide Where Customers Can Purchase Gift Cards

A gift card program won’t do much if customers don’t know it exists. Give them a few easy ways to find it.

At your physical location, the checkout counter is a natural starting point. Customers are already making a purchase, so a visible display or a quick mention from the cashier can put gift cards on their radar.

Online, add gift cards to your website where shoppers can find them without digging. You can also include them in holiday emails and social posts, especially as shipping deadlines approach.

Think of it as making gift cards part of your holiday assortment, rather than an option customers have to stumble across.

Use Your POS to Manage Gift Card Sales

Your POS system shouldn’t make gift cards harder to manage than they need to be. Ideally, employees can sell and redeem cards through a familiar checkout process, while the system keeps track of the balances and transactions.

If your business sells both online and in-store, check whether your POS and gift card setup support activity across both channels. Customers shouldn’t have to guess where a card works, and your employees shouldn’t have to piece together balances from separate systems.

Before choosing a program, find out how it handles sales, redemptions, balance checks, and reporting. Those details may not be the flashiest part of launching gift cards, but they’ll matter when the checkout line starts growing.

Establish Gift Card Rules Before Launch

A few decisions made now can save plenty of confusion later. Before selling gift cards, work out the details customers and employees are most likely to ask about.

Consider the amounts you’ll offer, where cards can be redeemed, how returns and refunds are handled, and whether customers can add funds to an existing card. Some systems support reloading; others require a new card for each purchase, so confirm how yours works.

You’ll also need to review applicable rules around expiration dates, fees, and unused balances. Requirements vary by jurisdiction, so check the laws that apply to your business before setting your policies.

Keep the rules easy to find and explain. If an employee needs a five-minute explanation to answer a basic gift card question, it’s worth revisiting the process.

As you plan your holiday promotions, think about how gift cards might fit alongside other offers. For example, a holiday rewards program can complement your gift card strategy and give customers another reason to shop with you during the season.

Test the Entire Customer Journey Before Launch

Before putting gift cards in front of customers, run through the process yourself. Buy a physical card, purchase an eGift card, and test redemption wherever you plan to accept them.

Check that the balances update correctly, transactions appear where expected, and the process works across supported channels. If reloading is available, test that, too.

Then let your employees try it. They should know how to sell a card, check its balance, and handle common questions without having to stop and figure things out during a rush.

A little testing before launch can prevent a lot of avoidable headaches later.

Common Mistakes to Avoid When Launching a Gift Card Program

A gift card program can be straightforward to run, but the details still matter.

Here are a few places where retailers can trip themselves up:

Launching Too Late

If customers first hear about your gift cards a few days before the holidays, you’ve missed much of the time they could have spent considering them.

Give yourself enough lead time to set up the program, test it, train employees, and work gift cards into your holiday marketing. You don’t need a months-long campaign, but you do need more than a last-minute sign at the register.

Making Redemption Difficult

Selling a gift card is the easy part. The recipient’s experience is what follows.

If customers can’t figure out where to redeem their cards, or employees aren’t sure how to process them, a convenient gift quickly becomes a frustrating one. Make redemption rules clear, train your team, and test each supported channel before launch.

Ignoring Digital Buyers

Your customers don’t all shop the same way. Some want to browse your shelves, while others would rather make a purchase from the couch and send a gift in minutes.

Offering only physical cards may leave out shoppers who prefer a digital option. Consider whether eGift cards fit your audience and whether your system can support online purchases alongside your in-store program.

Failing to Track Performance

A strong sales figure can be encouraging, but it doesn’t tell you everything you need to know.

Look at how many cards you sell, how much value gets redeemed, and whether the program appears to bring new customers into your business. Your reporting tools may offer different levels of detail, so focus on the metrics your system can reliably provide.

Without that information, it’s harder to tell which parts of the program are working and what you might change next time.

Treating Gift Cards as a Set-and-Forget Product

Adding gift cards to your checkout doesn’t mean customers will automatically notice them. They need a reason to consider them and a reminder that they’re available.

Keep gift cards in the conversation throughout the holiday season. Include them in your marketing, make them visible on your website, and give employees a natural way to mention them.

Then carry that attention into the new year. Reviewing redemption activity and customer behavior can help you find opportunities to encourage return visits and prepare for the next holiday season.

How to Choose a Gift Card Program for Your Small Business

Choosing a gift card program isn’t about collecting the longest list of features. It’s about finding something that works with your business, makes sense for your customers, and doesn’t create extra work for your team.

POS Compatibility

Start with your existing POS. Can the gift card program work with it? Can employees sell and redeem cards through the checkout process they already know?

Find out how the system tracks balances, records transactions, and handles balance checks. A compatible setup can make gift cards easier to manage without adding another disconnected process to your day.

Omnichannel Capabilities

If customers shop both online and in-store, make sure your gift card program can support the experience you want to offer.

For example, can someone purchase an eGift card online and redeem it at your physical location? Can a customer buy a physical card at the register and use it for an eligible online order?

Cross-channel redemption can give customers more freedom, but don’t assume every program supports it. Confirm that your specific setup keeps balances synchronized and handles redemption correctly.

Flexible Gift Card Values and Balance Management

Customers may want to give $20, $50, or an amount that falls somewhere in between. A program that supports preset values and custom amounts can give them more choice.

Balance management deserves a closer look, too. Can customers add funds to an existing card, or must they purchase a new one? If reloading is supported, can employees handle it at the register, and will the updated balance carry across your online and in-store channels?

These aren’t minor details when you’re the person managing the program. They affect what customers can do and how much work your team needs to put in.

Reporting and Performance Tracking

You’ll want a clear picture of how the program is performing. Depending on your system, reports may include cards sold, total value loaded, redemptions, outstanding balances, and transaction history.

The more clearly you can see what’s happening, the easier it is to evaluate the holiday results and decide where to focus your efforts next season.

Security and Fraud Controls

Gift cards carry monetary value, so they deserve the same thoughtful attention you give other transactions.

Ask how the program handles card activation, balance changes, redemptions, and transaction records. Find out what controls are available for lost or stolen cards and how employee permissions work.

No system removes every risk, but appropriate controls and clear procedures can help your team spot problems and handle transactions consistently.

How to Measure the Success of Your Holiday Gift Card Program

Once your gift card program is up and running, how do you know if it’s working? Looking at a few key numbers can help you see what’s going well, how customers are using their cards, and where there’s room to improve.

Gift Card Sales

First, take a look at how many gift cards you’ve sold and their total value. If your reporting separates physical gift cards from eGift cards, check those numbers individually, too.

This can give you a feel for which options customers prefer and where it might make sense to focus your promotions.

Make gift cards part of your holiday strategy, launch before the holiday season! >

Gift Card Redemption

Selling gift cards is one thing, but when are recipients actually using them? That’s where redemption comes in.

Look at how much gift card value customers have redeemed and when those purchases happen. Some recipients might use their cards during the holidays, while others may wait until January or even later. Keeping an eye on both periods gives you a fuller picture of how your program is performing.

New Customer Activity

Gift cards can introduce your business to people who haven’t shopped with you before. But how can you tell if that’s happening?

Depending on the information your system tracks, you might look at new customer accounts, loyalty enrollments, or other signs of first-time visits. Just keep in mind that not everyone redeeming a gift card is a new customer. Use the data you have to spot possible trends rather than assuming every redemption represents a new shopper.

Incremental Purchase Behavior

Here’s another thing worth looking at: do customers tend to spend more than the value on their gift cards?

For example, someone might use a $30 gift card toward a $45 purchase and pay the remaining $15 themselves. Looking at transactions like these can help you understand how recipients shop when they redeem their cards.

Of course, spending more than the gift card balance doesn’t necessarily mean the card prompted that extra spending. It’s simply one useful pattern to keep an eye on.

Holiday vs. Post-Holiday Performance

Don’t pack away your gift card reports once the holiday rush is over. What happens in the weeks afterward can tell you quite a bit, too.

Compare gift card sales and redemptions during the holiday season with activity in January and beyond. You might find that sales peak in December, while recipients do most of their shopping after the holidays. That information can help you decide when to promote gift cards and how to encourage customers to keep coming back in the new year.

Conclusion

A gift card program can give small businesses another way to connect with holiday shoppers, introduce new customers to their products, and create opportunities for future sales. The key is to make cards easy to buy and redeem, promote them where customers will see them, and keep track of how they’re performing.

You don’t need to overcomplicate the process. Start with a program that fits your business, test it before launch, and use what you learn during the holidays to make next season even better.