What Are Shopify Gift Cards and Why Should You Offer Them?
Shopify gift cards are digital or physical store credit instruments that buyers purchase as gifts or that you issue as store credit for returns, promotions, and loyalty rewards. Gift cards serve multiple strategic purposes beyond enabling gift purchases: they capture revenue from buyers who want to give a gift but don’t know what to choose; they provide a frictionless alternative to cash refunds that keeps money in your store; they enable gifting-occasion marketing campaigns with specific products; and they can be issued as loyalty rewards, promotional incentives, or compensation for poor customer experiences. Unlike many e-commerce tools that require strategic sophistication to implement effectively, gift cards are straightforward to set up and immediately accessible to any buyer who wants to give the gift of choice rather than a specific product. This guide covers how to set up, sell, and strategically use Shopify gift cards across your store.
Step 1: Create and Configure Gift Cards in Shopify
Setting up gift cards in Shopify admin is straightforward:
- Enable gift cards in Shopify — in Shopify admin → Products → Gift cards, you’ll find Shopify’s built-in gift card functionality. Gift cards are available on all Shopify plans (Basic and above). Create a new gift card product by clicking “Add gift card.”
- Configure gift card denominations — Shopify gift cards are configured as product variants representing different values: $25, $50, $100, $150, $200, $500. Create denominations appropriate to your typical order value and gift-giving contexts. For stores with a higher average order value, higher denominations ($100, $200, $250) reflect realistic gift values. Include a custom amount option via apps if your buyers frequently want specific denominations.
- Gift card expiration — Shopify allows setting gift card expiration dates, but expiration policies vary by law across US states and countries. California, for example, prohibits gift card expiration. If you sell to US buyers, either don’t set expiration dates or consult legal guidance for your specific states. In most contexts, no-expiration gift cards are the most customer-friendly and legally safest approach.
- Digital gift card delivery — Shopify sends gift cards via email with a unique code. The recipient receives an email with their gift card code, balance, and instructions for redemption at your store. No physical card printing or mailing is required for digital gift cards — the entire process is automated upon purchase.
- Physical gift cards — for stores with physical retail presence (pop-up markets, Shopify POS), physical gift cards can be printed and associated with unique codes in Shopify admin. Shopify supports scanning physical gift card barcodes at POS checkout. For online-only stores, digital gift cards are sufficient.
Step 2: Create Compelling Gift Card Product Pages
Gift card product pages need specific optimization to convert buyers who are considering a gift card purchase:
- Occasion-specific messaging — gift cards are purchased for specific occasions (birthday, holiday, wedding shower, “thank you”). Your gift card product page should acknowledge these occasions explicitly: “The perfect gift for birthdays, holidays, and any occasion — let them choose their favorite [product category].” Occasion-specific framing helps buyers who are stuck on what to give feel confident that a gift card is an appropriate choice.
- What the recipient can buy — show appealing examples of what recipients can purchase with the gift card (product images, category overview) so buyers can visualize the gift they’re giving. A buyer considering a $50 gift card for a candle enthusiast is more likely to purchase when they can see the beautiful candles their recipient will choose from.
- Personalization options — Shopify’s digital gift cards allow adding a personal message that appears in the gift card email. Make this option prominent: “Add a personal message to your gift card — we’ll include it in the recipient’s email.” Personal messaging transforms a transactional gift card into a personal gift.
- Gift card design — Shopify gift card emails use your store’s branding. Customize the gift card email template in Shopify admin → Settings → Notifications → Gift card to reflect your brand’s visual identity. A beautifully branded gift card email makes the gift card feel premium rather than like a last-minute fallback.
Step 3: Issue Gift Cards as Store Credit for Returns
Gift cards as return credit is one of the most strategically powerful gift card applications — keeping return value in your store rather than refunding to the original payment method:
- Gift card vs. refund for returns — when processing a return, you can choose to refund to the original payment method or issue store credit as a gift card. Issuing store credit keeps the revenue in your store — the buyer will spend the credit on a future purchase rather than losing the revenue to a credit card refund. Best practice: offer store credit as an option alongside refund, making the credit slightly more generous (a $50 return becomes a $55 gift card credit) to incentivize choosing credit over refund.
- Defective product gift card compensation — for low-value defective items where requesting a physical return isn’t economical, issue a gift card covering the product value plus a bonus amount in compensation. This resolves the defective product situation without the cost and logistics of return shipping while maintaining a generous, customer-friendly resolution.
- Price adjustment gift cards — when a product goes on sale shortly after a purchase, rather than processing a partial refund, issue a gift card for the price difference amount. This maintains the customer relationship while keeping the money in your store.
Step 4: Issue Gift Cards as Loyalty Rewards
Gift cards as loyalty program rewards are more compelling than percentage discounts because they feel like real money rather than a discount:
- Birthday gift card rewards — sending a birthday gift card (a specific dollar amount, e.g., $10-$20 depending on customer value) to loyalty program members on their birthday creates a powerful emotional touchpoint while driving a birthday-month purchase. Gift card rewards for birthdays consistently outperform percentage discount birthday offers in both redemption rate and purchase size triggered.
- Milestone reward gift cards — when customers reach spend milestones (“thank you for your 10th purchase — here’s a $25 gift card as our appreciation”), gift cards communicate genuine gratitude in a tangible form that percentage discounts don’t achieve.
- Referral reward gift cards — successful referral rewards delivered as gift cards feel like real value rather than temporary promotions. “Thank you for referring [friend’s name] — here’s a $20 gift card to spend on anything in our store” converts referral program participants into additional purchasers.
- Shopify Flow gift card automation — Shopify Flow can trigger gift card issuance automatically based on store events: when a customer reaches 5 orders, Flow can automatically issue a $15 gift card and notify the customer. This automation delivers loyalty rewards without manual intervention.
Step 5: Run Gift Card Promotions Strategically
Gift card promotions drive both gift card sales and store traffic:
- Bonus gift card promotions — “buy a $100 gift card, get a $20 bonus gift card” promotions drive gift card purchases during gift-heavy occasions (holiday season, Mother’s Day, Father’s Day). These promotions are particularly effective for stores where gift cards are a natural gifting solution — the buyer gets genuine value (20% bonus), and the store captures revenue that will be spent in a future store visit.
- Holiday gift card campaigns — last-minute holiday shoppers (particularly those buying for recipients who already have everything) are prime gift card buyers if you market gift cards as a convenient, personal solution rather than a fallback. Email campaigns targeting holiday shoppers beginning 2 weeks before the holiday and emphasizing same-day email delivery position gift cards as the ultimate last-minute solution.
- Corporate gift cards — companies purchasing gift cards as employee rewards, client gifts, or incentives can be a significant B2B gift card revenue source. Create a dedicated corporate gifts page or contact form for volume gift card inquiries (10+ cards at once) and price larger corporate orders with a modest volume discount.
Step 6: Track Gift Card Performance and Breakage
Gift card analytics help optimize your gift card program:
- Gift card sales tracking — in Shopify admin → Customers → Gift cards, view all active gift cards, their balances, and issuance dates. Track monthly gift card sales volume and compare to overall revenue — gift cards as a percentage of holiday revenue is a useful seasonal performance metric.
- Breakage rate — “breakage” refers to gift card value that’s never redeemed. Unredeemed gift card value is recognized as revenue on a schedule per accounting standards (ASC 606 in the US). A typical gift card breakage rate is 10-19% of gift card value — some gift cards are lost, forgotten, or the recipient doesn’t find a suitable purchase. Breakage is financially positive (recognized revenue with no fulfillment cost) but should be managed ethically — don’t intentionally structure gift cards to expire or lapse.
- Redemption timing — track when gift cards are redeemed after issuance. Cards redeemed within 30 days represent immediate conversion; cards redeemed after 90+ days represent delayed revenue capture. Understanding redemption timing helps plan inventory and forecast cash flow from outstanding gift card liability.
Frequently Asked Questions
Do Shopify gift cards expire?
Shopify gift card expiration: you can configure Shopify gift cards with or without expiration dates. If you set an expiration date, the gift card becomes invalid after that date. However, gift card expiration laws vary significantly by jurisdiction — in the US, many states prohibit gift card expiration entirely (California, Washington, Connecticut, and others) or require minimum validity periods (typically 5 years). If you sell to customers in multiple US states or internationally, the safest approach is no expiration date on gift cards. Even where expiration is legally permitted, no-expiration gift cards are more customer-friendly and generate more goodwill. If you do need to set expiration for accounting or operational reasons, consult legal counsel for your specific jurisdictions and ensure expiration terms are disclosed prominently at purchase.
Can customers use multiple gift cards on one Shopify order?
Multiple gift cards per order on Shopify: Shopify’s native checkout allows customers to apply one gift card code per order. If a customer has multiple gift cards, they can apply them in sequence after the first card’s balance is exhausted — Shopify will prompt to apply additional payment. However, the native checkout doesn’t allow entering multiple gift card codes simultaneously in one transaction. Third-party apps (Multiple Gift Cards by Upg) enable true multi-gift-card redemption in a single checkout session. For most stores, the sequential application approach is sufficient — customers who want to combine gift cards can do so, just with the extra step of applying additional cards when prompted.
How do I send a Shopify gift card as a gift to someone else?
Sending gift cards to recipients on Shopify: when a customer purchases a Shopify gift card, they enter the recipient’s email address and an optional personal message during checkout. Shopify sends the gift card code and message directly to the recipient’s email. Alternatively, the buyer can have the gift card sent to their own email and forward it or share the code verbally. For stores where the gift card delivery experience is particularly important (premium, luxury, or occasion-specific stores), customizing the gift card email template in Shopify admin → Notifications ensures that the recipient’s gift card arrival experience reflects your brand’s aesthetic and tone. A beautifully designed gift card email with clear redemption instructions and a personal touch makes the gift feel thoughtful rather than perfunctory.
How do gift cards affect my Shopify accounting?
Gift card accounting in Shopify: gift card sales create a liability on your balance sheet (you’ve received money but haven’t delivered goods or services yet). When a gift card is redeemed, the liability converts to revenue and cost of goods sold on the purchase. Shopify tracks outstanding gift card liability automatically. For accounting purposes: gift card sales are not revenue at the time of sale; revenue is recognized when the gift card is used for a purchase. Breakage (unredeemed gift card value) is recognized as revenue on a reasonable expectation basis per your accounting standards (ASC 606 in the US, IFRS 15 internationally). Shopify’s gift card reports show outstanding gift card liability (total value of unredeemed cards) that you should reconcile with your financial records periodically. For stores with significant gift card volume, consult your accountant about proper gift card liability recognition and breakage accounting treatment for your specific jurisdiction.
Can I offer Shopify gift cards as loyalty program rewards?
Gift cards as loyalty rewards on Shopify: yes, and this is one of the most effective loyalty reward formats because gift cards feel like real money rather than discounts. Implementation options: manually issue gift cards from Shopify admin to loyalty program members who’ve earned rewards; use Shopify Flow to automatically trigger gift card issuance when customers reach specific milestones (order count, lifetime spend); or use a loyalty app (LoyaltyLion, Smile.io, Yotpo Loyalty) that integrates gift card rewards into the loyalty program points redemption system. The gift card loyalty reward works best when: the value is meaningful relative to the purchase threshold (a $15 reward for $200 in purchases feels substantial; $1 for $100 feels token); the delivery is timely (reward received immediately after milestone, not weeks later); and the communication frames the reward as genuine appreciation rather than a programmatic discount (“as a thank you for your loyalty, here’s a gift to spend however you’d like”). Gift card loyalty rewards consistently generate higher redemption rates and purchase sizes than equivalent percentage discount rewards.
Final Thoughts
Shopify gift cards are one of the most versatile and underutilized tools available to Shopify merchants — they serve as gifting solutions that capture seasonal revenue, return credit that keeps money in your store, loyalty rewards that feel like genuine appreciation, and promotional instruments that drive purchase during key marketing moments. The setup is minimal and the strategic applications are extensive. Start by enabling gift cards, creating denominations that reflect your typical order value, customizing the email template to match your brand, and actively marketing gift cards during gifting occasions. Then layer in the advanced applications: store credit returns, birthday reward automation, and bonus gift card promotions that compound the initial setup into a genuine revenue-generating program.
For more on Shopify revenue optimization, explore our guides on loyalty program setup, discount code strategy, and seasonal gift guide strategy.
