The Impact of Gift Card Promotions

You developed your gift card program, and it’s successfully up and running. Now’s the time to sit back and watch the customers come to you, right? Well, in a perfect world, that would be the case. But even though gift cards and vouchers are top-of-mind to you, there is still a lot of awareness to build for these programs, particularly with your digital e-card offerings. In the UK alone, for example, digital gift card penetration among consumers is growing, but it’s only at 45% of total gift cards distributed!*

So now that you’ve completed the hard part of building out the program, the fun part should begin — seeing what moves the needle and learning how you can drive more sales.

One proven way to do this? Promotions.

A well-designed promotional strategy will help bring more customers, more revenue, and long-term success to your brand. Most brands typically run promotions for certain aspects of their business, but not always specifically for their gift card offering. Gift card promotions can serve as a lead driver and awareness-building tool in your marketing arsenal. Among other things, they can drive sales for a targeted time period, help you get repeat customers, and drive incremental spending per visit. Furthermore, running a promotion with gift cards is incredibly effective because you are locking in spend at the earliest point in the customer journey. Whether the customer is purchasing gift cards for self-use or gifting, you are serving up the potential for larger sales and return visits.

Here are a few things to consider when thinking about promotions and how they fit within your marketing strategy:

What should the offer be?

Promotional offers are an important consideration for many consumers. A recent survey found that nearly three-fourths (74 percent) of respondents say offers are a top factor when deciding where and what to buy online.** Brands tend to test a variety of offers to see what works best for their individual goals/objectives. For example, offers can revolve around an added value approach (“Buy $50, get a $10 bonus”), a gift with purchase (“Buy a gift card and receive a free appetizer.”) or a timed bounce-back strategy (“Buy a $50 card now and get a $10 to spend another time.”) Developing a testing strategy of discounts offered, bonuses included and timing and length of campaigns is key to determining the best approach moving forward.

How should you market your promotion?

Regardless of if your promotion is in-store or online (or both!), marketing for the campaign should have a presence in both places. If you are a brick-and-mortar brand, take advantage of on-site point-of-sale — wall/window signage, checkout area displays, bag drops, employee flair, and more. Your “owned” digital assets — the website, social media channels, and email CRM platform should be utilized and are great ways to get quick and measurable metrics and program feedback. And of course, should budget allow, paid targeted advertising — SEM, paid social media, programmatic digital ads, and more — should be used if relevant.

How should you measure results?

Depending on the access you have to data and analytics, there are a wide variety of things that should be measured when evaluating your program, including:

Pre and post-promotion activity

  • In order to determine if your sales are increasing, you should take a baseline measurement of typical sales revenue from the periods right before and after the promotional period.
  • Also worth considering are your year-over-year sales figures. Measuring year-over-year sales may be tricky in COVID times thanks to the uniqueness of the 2020–21 time period, but consider if 2019 data serves as a more accurate measurement point.


  • Overspend is the incremental amount spent above the value of the card that happens when a consumer uses their gift card (also referred to as the lift.) This is one of the few financial areas where a higher overspend is a good thing! On average, UK shoppers spend an extra 35% over the value of the gift card during redemption.*** How do your metrics compare?

Speed of redemption

  • Are consumers redeeming their vouchers during the times you want? It doesn’t matter if you want them to redeem sooner or later, make sure you have a POV going into the campaign on what’s the financial goal so that you can measure the performance against it.

Return on investment

  • Just like any marketing initiative, you should determine the overall ROI of the campaign to determine if you hit your goals and if the campaign is worth repeating (and/or adjusting). Tangible expenses such as production and fulfillment costs, discounts to third parties, marketing/advertising fees, and more should be considered. Also worth discussing is when to take the ROI measurement. Speed of redemption and breakage could play a factor in telling the true story of your campaign performance.

Ready to get started? A good first step is to gather input and ideas from your company’s Marketing, Finance, and Operation departments and your fellow gift card peers. Putting together a promotional campaign is a team effort, and it’s helpful to have all parties aligned with goals and objectives from the initial discussions.

All of the above is just the tip of the iceberg when it comes to promotional planning. While there is a lot of planning and effort involved, there is a lot of learning and potential success that can come as a result!

Interested in learning more? Find out how Prizeout helps brands with their promotional efforts here.





Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s