Using gift card promotions in your marketing strategy

Gift cards are more than a token of appreciation. When integrated thoughtfully into your marketing strategy, they can drive revenue, boost customer loyalty, and protect your profit margins in ways that traditional discounts can't.

This guide walks you through how gift card promotions work, why they outperform discounts, and 20+ campaign ideas you can adapt to your business goals.

Key takeaways 

• Gift card promotions pack a serious punch: they can reduce cost-per-lead by up to 81%, increase conversion rates by 11%, and boost average order value by 10%.

• To get started, define your audience, set clear goals, choose the right distribution channels, and think strategically about timing.

• Use gift card promotions to acquire customers, boost retention, reactivate dormant accounts, drive referrals, capitalize on seasonal moments, and grow your social presence.

• Real brands are seeing results: one company added 180,000 new customers after switching from discounts to gift cards, and another saw a 17% drop in customer service issues by switching rebates to gift cards.

• Keep redemption simple, set generous expiration dates, and automate distribution to create a smooth customer experience.

Why gift card promotions work

Gift card promotions offer several benefits for marketing teams. They tap into consumer psychology in ways that drive measurable results across conversion rates, average order value, and repeat purchases.

The psychology behind gift card effectiveness

The "free money" effect. Consumers perceive gift cards as found money rather than a discount on something they were already buying. This psychological framing makes gift cards feel like a bonus rather than a price reduction, which preserves your brand's pricing integrity while still motivating customers to spend with you.

The endowment effect. Once someone receives a gift card, they feel ownership over that value. Research shows people are loss-averse, meaning they're more motivated to use something they "have" than to pursue a discount they might get. This drives higher redemption rates and return visits.

Urgency without desperation. Gift cards with expiration windows create natural urgency. Unlike flash sales that can cheapen your brand, a gift card redemption deadline feels like a reminder to use something valuable rather than pressure to buy before a deal disappears.

The data behind gift card performance

The psychology checks out, and so do the numbers. Here's what the research shows about gift card effectiveness.

Gift cards boost conversion and AOV (Average Order Value) twice. A study showed that structuring your promotion as "spend X now, get a gift card later" increases conversion rates and AOV both now and later. Customers are 11% more likely to make a purchase and spend 10% more at the time of the promotion. When they return to redeem, they're 27% more likely to purchase and spend around 2% more. The study also found that simply seeing the ad for your promotion can increase spending, even if the customer doesn't participate.

Flexibility drives preference. 72% of consumers prefer gift cards because they let recipients choose their own rewards. Rather than saddling new customers with a specific product, gift card promotions give prospects and customers the freedom to spend on something they actually want.

Gift cards motivate action. 80% of consumers have made the decision to shop somewhere based on gift card loyalty incentives at least once. That's a powerful lever for driving first purchases, repeat visits, and referrals.

They reduce acquisition costs. Research shows gift card promotions can reduce cost-per-lead and customer acquisition costs (CAC). We ran an internal study offering a gift card to prospects for taking a demo and reduced cost-per-lead by a whopping 81%. Gift card promotions can deliver similar results across acquisition campaigns, referral programs, and re-engagement efforts.

Gift cards protect your brand. Unlike discounts, gift cards don't condition customers to expect lower prices. When you discount heavily, some customers start questioning why they paid full price in the first place. Others second-guess product quality. Deep discounts can be "detrimental to the consumer perception of the brand and erode the value of the brand that the company has spent years building." Offering a gift card with purchase sidesteps this risk entirely while still delivering tangible value to the customer.

How to structure a profitable gift card offer

Before diving into campaign ideas, you need a framework for designing offers that drive impact without hurting your margins. Here's how to think through the mechanics.

Setting the right gift card value

The value you offer should balance motivation with profitability. Here's a general framework:

Start with your target customer acquisition cost (CAC) and work backward. If your typical CAC is $150, you have room to offer a $50-75 gift card for new customer acquisition. If your margins are thinner, scale the value down accordingly.

Minimum purchase thresholds

Thresholds protect your margins while encouraging larger orders. Common structures include spend $50 to get a $10 gift card (20% effective value), spend $100 to get a $20 gift card (20% effective value), and spend $200 to get a $50 gift card (25% effective value).

The higher the threshold, the more generous you can be with the gift card value. Test different threshold/value combinations to find what drives the best incrementality for your business.

Redemption windows and caps

Set clear guardrails to protect against abuse and forecast costs accurately. Define redemption windows that create urgency without frustrating customers (30-90 days is typical for promotional gift cards). Consider per-customer limits for evergreen campaigns. Set budget caps that allow you to pause or adjust if redemption exceeds projections.

Campaign swipe: Email copy example

Here's a sample email for a first-purchase gift card campaign:

Subject: Your $25 gift card is waiting

Body: We'd love to have you as a customer. To make your first order even better, we're offering a $25 Amazon gift card when you place your first order of $75 or more.

Just use code WELCOME25 at checkout. Your gift card will arrive within 48 hours of your order shipping.

This offer expires [DATE]. [Shop now →]

Terms: Offer valid for new customers only. One gift card per household. Orders must total $75+ before shipping. Gift card delivered via email within 48 hours of order fulfillment.

How to plan your gift card campaign

Before launching a gift card promotion, answer a few strategic questions. The right answers will shape your campaign mechanics, budget, and distribution approach.

Who is your target audience?

Just like any other marketing initiative, your gift card campaign should be shaped around your target audience. Are you focused on acquiring new customers or rewarding existing ones? Are you targeting high-value segments or casting a wider net?

Once you've identified your segment, dig into their buying behaviors and preferences. Consider which products they typically buy, how much they tend to spend per purchase, what their purchasing journey looks like, how often they engage with your brand, and other brands this demographic likes.

Understanding these behaviors will help you develop a campaign that motivates your target audience to take the desired next step.

What are your campaign goals?

Is your campaign goal to increase customer loyalty? Re-engage dormant customers? Drive more referrals to your business? Your goals should directly inform the type of marketing campaign you launch.

Once you have a general direction, get specific. Attach measurable objectives based on previous campaign benchmarks. If you've never run a gift card promotion before, start with a small test campaign to establish baselines.

When should you launch?

Timing matters. In most cases, you'll want to launch when customers are already making purchasing decisions in your category.

For retail, consider seasonality. Launch a gift card campaign in the weeks before Black Friday or Cyber Monday. If you're planning a birthday campaign for loyal customers, make sure they receive the incentive within a week of their actual birthday.

Look at your historical campaign data to identify which times of year generate the best response. And don't overlook "off-season" opportunities: a well-timed gift card promotion during a slow period can generate incremental revenue that wouldn't otherwise exist.

Which channels will you use?

Your distribution channel mix will shape the type of promotion you run. If Instagram is your primary channel, you might create a sweepstakes that enters followers when they tag a friend. If email is your workhorse, a straightforward "gift card with purchase" offer might be more effective.

Your channel also impacts campaign duration. A short-term, time-bound initiative might require a multi-channel blitz to reach a larger audience. An evergreen promotion triggered by a specific customer action can run continuously through email or in-app messages to smaller, targeted cohorts.

How much should your gift card be worth?

To determine the budget for your gift card campaign, start with your unit economics. Consider your lifetime value (LTV) to customer acquisition cost (CAC) ratio. If your ratio is typically 3:1, make sure your campaign doesn't significantly disrupt this balance.

Profit margins matter too. The gift card value should be a fraction of the anticipated profit from the customer purchase or engagement. Higher-priced items like appliances warrant larger gift card amounts, while lower-priced items like cosmetics warrant smaller amounts.

A good rule of thumb: offer enough value to motivate action, but not so much that you're giving away your margin.

Real examples: Gift card campaigns that work

Before diving into the full list of campaign ideas, here are three examples of how real brands use gift card promotions effectively.

Spot Pet Insurance: Thank-you gift cards for new customers

Spot Pet Insurance sends every new policyholder a $25 Amazon gift card 32 days after signing up. It's enough to buy a treat for their pet and serves as a thank-you for becoming a customer.

"On the sales side, it's great to tell partners that this is something we do," says Steven Gilliam, Head of Product at Spot. "We can say, 'Hey, you can offer this to your clients and tell them they could be getting a $25 gift card after their first month.'"

"It's really helped us stand out from our competitors," adds Shane Grosskopf, Compliance and Operations Manager at Spot.

Maytronics: Rebates simplified with gift cards

Maytronics, a manufacturer of robotic pool cleaners, switched from traditional rebates to gift cards for its rebate program. In 2024, qualifying purchases earned $50-$200 rebates delivered as gift cards. Using Tremendous, they saw a 17% decrease in rebate-related customer service issues.

Medical aesthetics company: Product launch acceleration

A medical aesthetics company had been offering discounts on future purchases, but customers didn't trust the value of the offer from a newer brand. After switching to $75 Visa gift cards, the company earned the #3 slot for market share while adding 180,000 new customers in just months.

PowerMarket: Referral incentives for clean energy adoption

PowerMarket is a software solution that connects people and businesses with clean energy projects in their communities. To drive new business, they launched a referral program offering gift card incentives to customers who refer friends.

"We receive positive feedback all the time," says Leland Gohl, Director of Marketing and CX at PowerMarket.

Microsoft Rewards: Points for everyday actions

Microsoft Rewards offers users points for everyday actions like searching with Bing or making Xbox purchases. Users can redeem points for gift cards to brands like Amazon, Target, and Starbucks.

The program works because points accumulate quickly, the reward catalog is valuable, and users hit small milestones frequently enough to stay engaged.

Gift card promotion ideas by goal

Below are 20+ gift card campaign ideas organized by objective. Mix and match based on your business goals and target audience.

Customer acquisition promotions

Gift card incentives can lower the barrier to a first purchase and give new customers a compelling reason to choose you over competitors.

1. First-purchase gift card. Offer a gift card to new customers who complete their first order. This lowers the barrier to trial and gives new customers a reason to come back. A $10-25 gift card often works well for mid-market products.

2. Sign-up accelerator. Offer a gift card to prospects who sign up for your email list, create an account, or take a specific action. This builds your database while giving prospects immediate value.

3. Demo incentive. For B2B or high-consideration purchases, offer a gift card to qualified prospects who attend a demo or consultation. Our data shows this can reduce cost-per-lead by up to 81%.

4. Limited-time bonus for first order. Add urgency by offering a bonus gift card for first orders placed within a specific window. "Order by Friday and get a $25 Amazon gift card" creates both incentive and deadline.

5. Spend threshold promotion. Offer a gift card when new customers hit a minimum purchase amount. "Spend $100, get a $20 gift card" encourages larger first orders while limiting your exposure to small transactions. Target uses this approach for online purchases, offering a free gift card with the purchase of multiple products — for example, $5 with the purchase of four beauty products.

Retention and repeat purchase promotions

Rewarding existing customers with gift cards keeps them engaged, increases lifetime value, and turns one-time buyers into loyal repeat purchasers.

6. Bounce-back gift card. Include a gift card with every purchase that's redeemable on the customer's next order. This encourages repeat visits and increases customer lifetime value.

7. VIP tier rewards. Create loyalty milestones that unlock gift card rewards. After a customer's 10th purchase or after they hit $500 in lifetime spend, send them a gift card as recognition.

8. Thank-you gifts. Gift cards are an excellent way to show appreciation after significant interactions — that’s why 25% of all gift card sales are specifically for thank-you gifts, making it the third most common occasion after birthday and holiday gifts. Send them after a large purchase, a successful project completion, or a loyalty milestone. 

9. Post-purchase review incentive. Offer a small gift card to customers who leave a verified review. This generates social proof while giving customers a reason to engage with your brand after purchase. Keep the value modest ($5-10) to attract genuine reviews rather than incentive-seekers.

10. Subscription renewal bonus. For subscription businesses, offer a gift card to customers who renew for another term. This reduces churn and rewards commitment.

Reactivation promotions

A well-timed gift card offer can bring dormant customers back into your funnel and reignite relationships that have gone cold.

11. Win-back gift card. Target customers who haven't purchased in 60-90 days with a "we miss you" gift card offer. 45% of recipients who receive a re-engagement email read subsequent emails, and a gift card can boost that number further. 

12. Cart abandonment rescue. The average online shopping cart abandonment rate is 70.22%. For high-intent customers who abandoned their cart, follow up with a gift card incentive to complete their purchase. This works especially well for high-value items where a small gift card can tip the decision. Sephora uses this approach with Beauty Insider customers with abandoned carts. Emails offer $15 gift cards for returning and making a purchase of $50 or more.

13. Lapsed customer reactivation. Create a dedicated campaign for customers who haven't engaged in 6+ months. A generous gift card offer ($25-50) can re-establish the relationship and bring dormant customers back into your funnel. Italian restaurant chain Buca di Beppo offers long-absent customers a $20 gift certificate for returning to spend $40 or more.

Referral and advocacy promotions

Gift cards give your happiest customers a tangible reason to spread the word — and make it easy to reward both the referrer and the new customer they bring in.

14. Double-sided referral program. Offer gift cards to both the referrer and the referred friend. 92% of consumers trust recommendations from friends and family, and referred customers have a 37% higher retention rate than those acquired through other channels. Shapermint, a B2C shapewear company, runs a double-sided referral offer where both referrers and referees get $25 — an approach that drives loyalty for twice as many customers compared to single-sided referral programs.

15. Ambassador milestone rewards. Create an advocacy ladder where your most active referrers unlock progressively valuable gift cards. Top referrers might earn $100+ gift cards, creating an incentive to keep sharing. ZenBusiness, which helps businesses file LLCs and stay compliant, taps into business owners' networks with a referral program that rewards referrers with a $50 Amazon gift card.

16. Partner co-marketing incentive. Collaborate with complementary brands on joint gift card promotions. You can expand your reach while sharing the cost of the incentive.

17. User-generated content reward. Offer gift cards to customers who create content featuring your product. Social proof from real customers is incredibly valuable, and a gift card makes it worth their effort.

Seasonal and event-based promotions

Tying gift card offers to holidays, product launches, or company milestones creates natural urgency and aligns your promotion with moments when customers are already primed to buy.

18. Holiday "gift with purchase." During peak shopping seasons like Black Friday, Cyber Monday, or the December holidays, offer a gift card with qualifying purchases. 39% of total holiday budgets are spent on gift cards, so customers are already in a gift card mindset.

19. Mother's Day/Father's Day bonus. Create gift-giving promotions where customers who purchase during these windows receive a bonus gift card for themselves. Everyone likes a little something extra.

20. Product launch reward. Tie a gift card promotion to a new product launch. Early adopters get rewarded, and you generate buzz around the launch.

21. Anniversary celebration. Celebrate your company anniversary or brand milestones by offering gift cards to customers who've been with you since the beginning. Ikea celebrated the 40th anniversary of its first US store with 40 weeks of deals for loyal customers, including 20 straight days of gift card giveaways.

Social and community growth promotions

Gift card giveaways and opt-in incentives can accelerate audience growth across social channels, email lists, and online communities.

22. Social media giveaway. Run a giveaway where followers can enter by following your account and tagging friends. This approach drives new followers and encourages brand engagement through likes, shares, and comments.

23. Email/SMS opt-in incentive. Offer a gift card to people who join your email or SMS list. Make sure to comply with promotional rules and clearly communicate the terms.

24. Community engagement reward. For brands with active online communities, offer gift cards to members who contribute valuable content, answer questions, or help other members.

What not to do with gift card promotions

When it comes to gift card marketing campaigns, here are common mistakes you want to avoid: 

Complex redemption processes. There's no worse feeling than receiving a gift card only to run into obstacles while trying to redeem it. Complexity hinders customers from using their reward and leaves a bad taste. Keep the redemption process as simple as possible with clear instructions and minimal steps.

Short expiration dates. People are busy and may not redeem their gift cards immediately. The last thing you want is for a customer to finally pull out their gift card only to discover it's expired. Offer extended expiration dates to prevent this. Federal law prohibits expiration dates under five years for most gift cards.

Manual processes. Sending incentives manually creates operational headaches, introduces administrative burden, and increases the chance of errors that negatively affect customer experience. Choose a platform that automates distribution, tracking, and reporting. 

Unclear terms. Be explicit about who qualifies, what the gift card is worth, when it expires, and any restrictions. Ambiguity creates confusion and erodes trust.

Over-promoting. Gift card promotions should feel special. If you run them constantly, customers will start waiting for promotions rather than buying at regular price.

Checklist: Terms to include in your gift card promotion

When you launch a gift card campaign, document these details clearly:

• Who qualifies (new customers only, loyalty members, etc.)

• Minimum purchase threshold (if any)

• Gift card value and brand options

• Redemption window (when can they use it)

• Expiration date

• Per-customer limits

• Stacking rules (can this combine with other offers)

• Exclusions (products or categories that don't qualify)

Include this information in your promotional materials and make it easy to find during checkout.

Gift card promotions work best when they're easy to send and easy to redeem. Tremendous lets you send digital gift cards to customers, prospects, and referrers in minutes — with no order minimums and no subscription fees. Ready to see how it works?

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