Gift cards are becoming an essential tool for businesses of all sizes. Major brands like Apple, Airbnb, Starbucks, and Amazon promote them heavily to increase sales, improve cash flow, and meet the increasing preference for flexible and easy gifting options. Yet, many businesses hesitate to offer gift cards because of the perceived complexity and cost.

In this guide, we’ll explore everything you need to know about custom gift cards—from their benefits to how to implement them effectively. We’ll also introduce you to Cardivo, an easy to use tool that makes it simple and mostly automated to offer your own digital custom gift cards in under 10 minutes, with no technical know-how needed.

What Are Custom Gift Cards?

Custom gift cards are physical or digital cards offered by a business, pre-loaded with a specific amount, and typically given as a gift. You’ve probably seen walls of them at your local supermarket and your friendly big brand (like Amazon and Starbucks) pushing them heavily on their websites and in-store. There are also many options online that allow businesses to create and offer their own custom gift cards by adding their logo and image onto a prepaid visa or mastercard debit card.

Types of gift cards

Gift cards generally fall into two categories: open loop and closed loop.

Open loop gift cards

This is a popular type of gift card, especially when you look at options for digital gift cards. Open loop gift cards are ones where you can slap your logo and image on what is essentially a prepaid visa or mastercard debit card. Consumers like these because they can use them anywhere – like their next grocery shop or to fill up gas. But businesses that use open loop gift cards get very little benefit, beyond a bit of branding – as once people get them, there is no incentive for them to use them at your business and most will just use them to cover their usual expenses.

Closed loop gift cards

closed-loop-gift-cards-example-cardivo

Closed loop gift cards are ones that can only be redeemed and used at the business issuing them. With closed loop gift cards, businesses capture all the value from them – the person buying them initially pays you upfront, the person who gets the gift card then redeems it at your business, often for a higher total spend than just the value of the gift card. This brings you a new customer and additional revenue, while getting paid upfront. Closed loop gift cards are a win for everyone involved. This is why all the big brands only offer this type of gift card.

Many customers want to support smaller businesses they like but often choose larger brands when buying gift cards because of the convenience. With Cardivo, you can offer closed loop digital gift cards too, making it easy for customers to support your business instead. Try it free.

Are gift cards relevant for your business?

The global gift card market is booming, valued at approximately $984 billion in 2023 and projected to reach $5 trillion over the next decade. Businesses like Apple, Starbucks, and Airbnb already use this trend to drive growth and get new customers.

For businesses without the scale of the large brands, custom gift cards can be a valuable asset that helps you grow your business. In fact they are even more useful if you’re a small or medium sized business as they help you expand your reach and grow revenue. Here’s why they matter:

  1. Increase sales to existing customers

    Offering easy to buy digital gift cards (and promoting them to existing customers) helps put your business in the mix when customers are thinking about gifts for special occasions and birthdays. Assuming you offer a quality and unique product or service, and an excellent purchase and redemption experience, this can make for an excellent and useful gift that the buyer can tailor based on their budget.

  2. Improve your cashflow

    Having good cashflow is crucial to businesses of any size, but absolutely critical for small and medium sized or self-funded businesses. Offering gift cards lets you get paid upfront for a product or service you don’t have to provide immediately. Over time this can boost and help improve your cashflow. Gift cards are basically like an interest-free loan given to your business by your customers.

    According to Starbucks’ own corporate filings, in mid 2024, they had $1.77 billion in unredeemed gift card balances. That’s billion with a B. While your gift card program will likely have a lower balance, the principle is the same – gift cards help fund your business with revenue you receive in advance. And some of that balance will be redeemed months or years later, or not at all.

    Source: https://www.marketwatch.com/story/the-bank-of-starbucks-coffee-retailer-has-1-77-billion-in-unredeemed-gift-cards-138df8f5

  3. Get new customers, while getting paid for it

    Gift cards are typically given to friends and family, and even by businesses to their valued clients and customers. Each gift card you sell represents a potential new customer for your business – and customers typically will spend more than the value of the gift card when they redeem it. And if you sell something they like, they’re likely to make future purchases too. It’s one of the only growth channels that pays you while bringing you new customers. Gift cards are an easy way to monetize your good reputation and product and let your existing customers bring you new ones.

Best practices for offering custom gift cards

To grow as a business and effectively use custom gift cards, it’s best you know how to offer them. Here are some key things we believe are important when choosing to offer gift cards.

Make the process simple

Make it easy for customers to buy gift cards. Nobody wants to waste time and effort on something that’s hard to find or takes too long to purchase. Promote your gift card offering in clear, visible locations. For your website, include banners and links to your gift card sales page, or if you have a physical location, promote your gift card offering along with large QR codes customers can scan to go straight to your purchase page.

Use a tool that makes it easy for your customers to easily buy and send gift cards and lets them pay with credit or debit cards, and even Apple Pay and Google Pay. We can think of one such easy to use gift card tool 🙂

Market them all year round

While gift cards are excellent to promote during holiday periods, don’t limit gift card promotions to just the holidays. Consistent marketing can create a steady revenue stream and attract new customers. A customer visiting on your website (or physical location) will be more likely to buy a gift card if they’re being clearly advertised. It can also make for a great impulse buy for customers that like your business but don’t have any specific product or service they want to buy at that moment. They can buy a gift card for themselves and use it in the future.

Offer different designs

Provide a variety of designs in your gift cards to appeal to different customers. This could include seasonal themes, holiday-specific designs, or special collections for events like weddings or anniversaries. Unique designs can make your gift cards more attractive and memorable. Use a system that provides beautiful default designs but also lets you upload your custom personalized designs.

Promote strategically

Promote your gift cards strategically through social media, email marketing, and in-store displays. Instagram is a good example of an effective marketing strategy, with 70% of shoppers using it for product discovery and purchases.

Be digital

With more and more people preferring to shop online, make sure you offer digital cards. They are convenient for customers and can be easily shared. They also make the perfect last-minute gifts.They cost you nothing upfront and can be purchased by anyone anywhere vs physical gift cards that need to be purchased in advance, stored and can be easily lost or stolen.

Digital vs Physical Gift Cards. Which ones should I offer?

As gift cards become increasingly popular, businesses sometimes struggle to pick between digital and physical gift cards. Both do the job, but digital gift cards have some clear advantages for you as the business owner, and for the people buying and receiving the gift cards:

  1. Cost

    Digital gift cards are cheaper to produce (essentially $0) since there’s no need for physical materials or shipping. For physical gift cards, you have to plan, pay and order them in advance, store them, display them and even ship them via post with added cost and complexity.

  2. Ease of use

    Digital cards can be bought and delivered instantly by and to anyone, anywhere in the world. Friends and family overseas or interstate can buy and send digital gift cards to someone’s favorite local restaurant or gym a whole world away. This is impossible with physical gift cards. For the person that gets a gift card, using a digital one is also easier as they always have it with them on their phone securely and can use it whenever. For physical gift cards, they must be typically kept safely and physically required to be redeemed.

  3. Security

    Digital gift cards are typically more secure than physical cards as the data about the gift cards is stored in secure systems. They are also easier to adapt – eg: if a gift card recipient reports that someone unauthorized has access to their card, modern gift card software lets administrators easily freeze the gift card and issue new ones as needed. If a physical gift card is lost or stolen they can be used by anyone.

  4. Consumer preference

    Many customers prefer digital gift cards over physical cards as evidenced by this Bank of America study because of their convenience and instant delivery. Let’s face it, many of us leave gift giving till the last minute and digital gift cards are a life-saver for that last minute birthday or Christmas gift!

  5. Tracking

    Businesses can monitor sales and customer data with digital cards in real time, when using a modern gift card system while physical cards require manual input, expensive scanning machines and even whole point of sales systems which can be clunky and expensive. Good digital gift card software will let you easily track gift card usage, redemptions, balances, and even revenue directly attributable to each gift card.

To summarize, we are biased, but we believe offering digital gift cards is the significantly better way to start and scale your gift card offering.

Offer your own beautiful, branded digital gift cards using Cardivo in under 5 minutes.

Cardivo is an easy to use system that lets you offer digital gift cards with no upfront or fixed cost. In fact, you never need to enter any credit card details. We just take a small percentage of sales you make through the platform. We only make money if we help you make money.

You can even pass on our fees to gift card buyers making Cardivo 100% risk-free and fee-free for you.

Just follow the simple steps below to get started:

  1. Create your free Cardivo account

    Go to cardivo.com or click here to access the signup page and sign up with your name and email. You don’t need to enter any credit card info, ever!

  2. Connect Your Stripe Account (or create a new one)

    Next we’ll ask you to connect your Stripe account. If you don’t have one, you can easily create a new free account in under 2 minutes. Stripe will request some essential business information, which may vary based on your country and business type, but the process is very simple. Stripe is one of the world’s leading (and we believe best) payment processors. We use Stripe to process all payments on Cardivo securely. Read more about Stripe here.

  3. Choose your gift card page link

    Next, select your sales page link—the URL where customers can buy your gift cards. You can change this link at any time in the future. We recommend using your business name with hyphens for spaces (e.g., acme-corp). So your sales page link will be something like this: https://demo.cardivo.com/giftcards/egift-cards-example – this is the link you can share with your customers anywhere to let them buy your gift cards from any device.

  4. Customize your gift card settings

    Personalize your gift card page with various settings. You can add your logo, choose your preferred currency (or let customers buy a gift card in various currencies), set a surcharge, specify a minimum amount, and many other options to tailor your gift cards to fit your business. You can even upload your own gift card images or choose some or all of our beautiful default ones.If you get stuck anywhere, just reach out to us via the chat icon – we’re happy to help with any setup as needed.

  5. Share your gift card link with the world

    Once you’re ready, Cardivo will generate a link for your gift card sales page. Here’s an example. Share this link with your customers through your website, social media, WhatsApp, or anywhere your customers are. They’ll be able to purchase your gift cards easily using a credit or debit card, Apple Pay, or Google Pay on any device.

Why choose Cardivo for your Custom Gift Cards?

Cardivo is one of the best options to offer digital gift cards. While we may be biased, we recommend trying it out for yourself to see if it suits you. We created Cardivo for businesses that want the power of gift cards without unnecessary complexity, outdated systems or salespeople. With Cardivo, you can be up and running in 5-10 minutes with no code or technical know-how. If you need a hand, we’re always here to help.

No fixed fees

Cardivo is free to try and use with no fixed fees. We charge a small 5% fee for sales made through the platform, which can be passed on to the buyer. This means zero risk for you. If Cardivo doesn’t help you sell, we don’t get paid.

Secure payment integration

Payments go directly and securely into your Stripe account, minus Cardivo and Stripe fees. From there, you can easily manage payouts to your bank account. Stripe is the world’s foremost payment processor and no sensitive payments data is stored or handled in Cardivo.

Hassle-free experience

Cardivo manages all aspects of gift card sales, delivery, balance checks, and more, saving you valuable time and effort. Forget about spreadsheets and manual management! You can redeem Cardivo gift cards on WooCommerce stores, on Stripe payment links, on Paythen Payment plan pages, or even manually via your admin dashboard. With more integrations coming soon.

Self-service

Gift card recipients can manage their cards anytime via secure gift card links like this, reducing the need for admin and customer support.

Send your data anywhere

Cardivo gift cards can be redeemed on a range of channels, and with our Zapier app, you can send Cardivo data to any systems you have – whether it’s your CRM or another tool, opening up a powerful way to automate even more.

Constantly improving

Unlike slow-moving corporations, Cardivo gets better constantly. We typically ship weekly updates, improvements and new features to help you sell more, with less admin.

Friendly, easy support

We offer professional, friendly and easy to reach support. We’ll help you any way we can with the initial setup or ongoing. No annoying forms or tickets, just click the chat icon and ask as anything, or email us at [email protected].

Offering digital gift cards with Cardivo is a simple and effective way to sell more to existing customers and get new customers. Create your free account today and see if it works for you. We’d love to have

Increase sales with
easy digital gift cards

Takes less than 5 minutes to start. No credit card needed.

We’ll ask you to connect your Stripe account or create a new one when you sign up. Cardivo uses Stripe for payment processing.