You can literally buy money at places like Costco Wholesale and Adidas, where $100 gift cards are going for $75. But can businesses buy customer loyalty and retention with a strong gift card program? The answer is a big YES.

According to Blackhawk Network and the National Retail Federation, Gen Z and millennials are all in on gift cards. This year, they plan to spend over half (54%) of their holiday budget on gift cards, up from 41% last year. Plus, loyalty programs are stepping in, helping them stretch their budgets. Among surveyed Gen Z and millennial consumers, 43% plan to use store or credit card points for holiday shopping, while 26% use loyalty points from airlines or hotels.

So, yes, gift cards can drive loyalty and retention—but only if done right. When used strategically, gift cards can turn one-time customers into regulars and brand ambassadors. Here’s how:

1️⃣ Encourage Repeat Visits: Gift cards—whether they’re rewards, incentives, or actual gifts—are an easy way to win customers back. Once they’re back, the chance of them buying more increases. Every visit reinforces brand trust and familiarity, building long-term loyalty.

2️⃣ Grow Your Customer Base Through Gifting: One person buys the gift card; someone else redeems it. Congrats, you’ve just introduced your brand to a whole new customer who may have never thought to shop with you. Blow them away with the experience, and they’ll be back for more.

3️⃣ Boost Your Loyalty Program: Use gift cards as rewards for milestones, achievements, or tier upgrades in your loyalty program. Customers love being rewarded for their loyalty. When customers feel appreciated, they stick around.

4️⃣ Keep Customers Engaged: Gift cards can fuel fun promotions and gamification. Think challenges, contests, or “spend X, get a gift card” campaigns. Engagement builds emotional connections, and connection builds loyalty.

5️⃣ Offer Flexibility and Convenience – Gift cards let customers pick what they want, reducing the hassle of returns. Plus, digital gift cards make it seamless and immediate. A happy customer is a retained customer who’s more likely to become a brand ambassador.

Starbucks nails it with its gift cards, seamlessly tying them into its loyalty program. Customers earn points by buying and using gift cards, which keeps them coming back. This creates an insanely loyal customer base hooked on the convenience and rewards.

Key Tips to Maximize Your Gift Card Strategy
➡️ Personalize promotions and tailor gift card offers to your customers’ preferences.
➡️ Go digital and make gift cards easy to buy and use online or in-store.
➡️ Gamify it with gift cards as rewards in challenges or promotions.
➡️ Integrate gift cards with your Loyalty Programs and reward milestones with gift cards to keep customers invested.

#GiftCards are more than just convenient gifts—they’re a loyalty-driving powerhouse when used strategically. You still have time to market your gift cards. One week Till Christmas!