The Gift That Keeps on Giving: Turning Gift Card Recipients into Loyal Customers

When the wrapping paper is gone and the holidays are over, one gift still has the potential to create lasting value: the gift card. 

Gift cards aren’t just convenient presents, they’re your gateway to bringing in new customers. Our data shows that retail businesses see an average of 17 days between the day a gift card is purchased to when the gift card is used, and 61% of customers tend to spend more than the value of the gift card. 

What does this mean? Even though the first two months of the year might be a little quiet when it comes to foot traffic, with gift cards, there’s an opportunity to keep your customers and cash flow rolling in. 

The challenge is transforming one-time gift card redemptions into repeat visits, bigger baskets, and brand loyalty. Here are a few ways for you to achieve that. 

1. Make the First Redemption Memorable

For many gift card recipients, it might be their first experience with your brand. And with all first impressions, this one definitely matters.

Here are some questions to think about:

• What value does your brand bring to your customers? 
• What keeps your customers engaged and coming back? 
• What do your existing customers say about your brand?

Being able to answer these questions can help you design your brand experience so that your best qualities are always front and centre. 

A positive customer experience should be the standard for all customers, but making sure the first-time gift card recipient has a good experience might be the difference between a new loyal customer and a dissatisfied patron. 

Of course, this might differ depending on your brand’s touchpoint: 

• In-store: Train staff to treat gift card users as valued guests, not discount seekers. A warm welcome paired with recommendations can set the tone, especially if it’s their first visit and are unsure where to begin. Offer to provide assistance where necessary, but don’t overdo it.
  
  
• Online: Ensure a seamless digital redemption process. Any friction (e.g. hidden fees or confusing steps) can sour the experience. 
  
  

2. Bundle Loyalty With Gift Card Redemption

A gift card redemption is the perfect time to invite someone to join your loyalty program. They’ve already shown intent to spend, making them more receptive to joining and engaging with your brand. By offering bonus points or other incentives at the point of redemption (like a free gift/samples when you join our loyalty program), you create an immediate sense of value while planting the seed for future visits. 

When you create extra value by offering loyalty rewards to someone who might be a first-time customer, it gives them an immediate incentive to return. Remember, the majority of customers often spend more than the value of the gift card. And once they’ve joined the loyalty program and started racking up rewards, it: 

• Encourages higher basket size to maximize rewards earned
• Strengthens the emotional connection of becoming part of your loyalty community
  
  

3. Incentivize the Second Visit

The redemption is your opportunity to make a good first impression, the second purchase is where the real change truly happens. Once customers come back, the likelihood of repeat visits increases. So make sure they feel like they’ve made the right choice. 

Strategies to drive that second purchase:

• Made an online purchase: Encourage a second order by sending personalized thank-you offers such as “Thanks for redeeming your gift card! Enjoy 15% off your next purchase” followed by timed email/SMS reminders.
• Made an in-store visit and did not join your loyalty program: Well, that’s not the end! When digital contact isn’t available, a traditional discount coupon handed to the customer at checkout can be an effective way to incentivize a return visit and drive repeat purchases.

• Joined your loyalty program: Perfect. Now you’ve got a little more data to play with, and you can even have those offers automated and personalized. How? Keep reading.   
  
  

4. Personalize Their Journey

Show your new gift-card-turned-loyal-member what value you can bring to them. Now that they’re part of your loyalty program, you can keep them engaged through seasonal promotions, personalized offerings, and birthday perks. 

Ways to personalize offers at the start of their membership:

• SKU-based rewards: Customer bought new beauty products with a gift card? Send a points multiplier on complementary skincare items or a free mini-sample with the next purchase

• Birthday rewards: Maybe it’s a birthday freebie or a one-time sitewide/storewide discount, but this once-a-year celebration makes customers feel valued for being and more likely to reciprocate when offered a gift.

The more repeat purchases they make, the more data you’ll begin to collect about these customers. Eventually, there will be more personalized promotions that you can serve to them. Personalization ensures customers feel recognized and valued, increasing the likelihood that they’ll engage with your loyalty program and return sooner.

Final Thought

With the right strategy, gift cards can evolve beyond a one-and-done transaction. Every card redeemed can turn into a long-term customer relationship by combining seamless redemption, loyalty integration, personalized offers, and smart re-engagement. Turn your gift cards into the gift that keeps on giving.