Gift Card Strategy for Christmas: Setup, Sales & Tracking

Regardless of what you sell, gift cards are a must all year round, but they really come into their own at Christmas, the reason being: they’re quick to sell, easy to give, and a lifesaver for anyone who’s stuck for ideas. For you, they mean money in the register before Christmas and customers coming back through the door after the holidays (and they might even spend over the gifted amount).

Also, they perform really well, better than ever, even! According to Pureprofile, gift cards were the most wanted Christmas present in Australia last year, at the top of 43% of wish lists. And Aussies are buying them, too, with 73% planning to buy retail gift cards for Christmas, and 41% spending $51–$100 on them.

But, as with everything, there’s a bit of a strategy to your gift cards; a good gift card setup is about more than printing a few cards and simply hoping for the best. But don’t worry, with a bit of prep and our helpful blog, you’ll be well on your way to smashing gift card sales out of the park this Christmas!

Why gift cards are worth the effort at Christmas

Let’s talk about why gift card strategy is really worth pausing over this year. Gift cards are invaluable for businesses big and small, and while they come in handy all the time, the festive season is when they really make a splash. Here’s why they’re a bit of a godsend:

• They bring money in early: You get paid when the card is sold, often weeks before it’s spent, which is handy once the post-Christmas lull sets in.
• They bring new customers through your door: The person spending the card might never have visited you otherwise.
• People often spend more than the card’s value: Research from Blackhawk Network found that 58% of shoppers say they’d spend more than a gift card’s value, so a $25 card can easily turn into a $40 sale.
• They stretch spending past Christmas: Gift card shoppers tend to leave gift card spending until after Christmas, when things would otherwise be winding down.

Plenty of shoppers are already buying them, too, whether as a present or for themselves, as a way to budget or treat themselves later on. So, if gift cards aren’t on your counter yet – they really should be!

Step 1: Decide what kind of gift cards to offer

So there’s a little bit of decision-making involved with how you approach gift cards. Your first decision will be the format, and you’ll be met with two main options, and most businesses benefit from both:

• Physical gift cards are great for in-store browsers who want something they can wrap or pop in a Christmas card. They look the part, and you can display them right by the register. Plus, you can have some fun designing them and really making them your own.
• Digital gift cards (e-gift cards) are sent by email or text, which makes them perfect for last-minute shoppers. Someone can buy one at 10 pm on Christmas Eve, and it’ll arrive in seconds. If you’re only selling physical cards, you could be missing out.

If you run a café, restaurant or pub, you could also sell vouchers for something specific, like a long lunch for two or a weekend brunch. That way, the gift can feel less like just cash and more like a gifted experience. And if you’re expecting a busy festive season, our guide to managing festive bookings, deposits and no-shows is worth a look, too.

Step 2: Get everything you need done ahead of time

Like most things, a bit of preparation goes a long way. Thinking things through before you start means that when the questions (inevitably) come in, you’ll have the answers ready. So, before you go full steam ahead, make sure you’ve sorted:

• Your terms and conditions: Under the Australian Consumer Law, most gift cards must be sold with a minimum three-year expiry period, and the expiry date has to be prominently displayed on the card itself. You also can’t charge post-supply fees, like activation or account-keeping fees, that eat into the card’s value. There are a few exceptions, such as some promotional cards that are given away for free, so it’s worth checking the ACCC’s guidance. Beyond that, decide whether your cards can be used online and in-store, and whether they can be used in more than one go, and make sure your terms are clear so customers know where they stand.
• How GST works: For most gift cards with a set dollar value, GST isn’t charged when the card is sold. Instead, it’s accounted for when the card is redeemed. Vouchers for a specific item or service can be treated differently, so it’s worth checking with your accountant how this applies to your business, so your figures are right from the start.
• How your team will handle them: Make sure your entire team knows how to sell, activate, and redeem a gift card, and what to do if a customer wants to check their balance. It’s much easier to run through this in November than on a packed Saturday in December.
• Your POS setup: Make sure your POS system can sell and redeem gift cards before the Christmas rush begins. If you’re using Epos Now, the VoucherCart integration lets you sell gift cards in-store and online, with every card tracked in one place. Set it up and run a test sale and redemption now, so there are no surprises when it gets busy.

Step 3: Make your gift cards easy to buy

This is really, very important. There’s nothing worse than a lengthy or clunky checkout process that leaves customers wondering if the transaction even went through, or how to send it to their chosen recipient. So here are a few simple pointers for making them visible and easy to get hold of:

• Put them by the register: Lots of people don’t realise you sell gift cards until they see them, so make them easy to spot while customers are paying. A small sign saying “Stuck for ideas? Gift cards available here” can be just the nudge a last-minute shopper needs.
• Sell them online: If you’ve got a website, add a gift card page and promote it in your Christmas emails and social posts, especially in the final week before Christmas, when delivery cut-offs have passed. If you’re not set up to take payments online yet, our guide to accepting payments online is a good place to start.
• Mention them at the right moments: If a customer’s umming and ahhing over a present, or the item they want is sold out, a friendly “We do gift cards, too” can save the sale.
• Think about business customers: Local companies often buy gift cards in bulk for staff Christmas presents or client thank-yous. A quick email or a chat with your regulars could land you a big order.
• Give a little extra: A small bonus, like a free $5 card for every $50 spent, can encourage people to buy more. Just make sure the numbers still work for you, and that bonus cards are only valid in January or February, so they bring people back when you need it most. Free promotional cards can be treated differently from paid-for gift cards under the three-year rule, but check the ACCC’s guidance before you launch.

Whatever you do, just make sure paying is easy. Long queues at the register are the last thing you want in December, so it’s worth checking your EFTPOS terminals are up to the rush. And for more ways to get the word out, take a look at our Christmas marketing ideas.

Step 4: Keep track of every card

Here’s something that can often be overlooked, and where many businesses get stuck. Once gift cards are out there, you need to know exactly how many you’ve sold, how much has been spent, and how much is still sitting on cards waiting to be used. Otherwise, it’s hard to know whether you’ve got enough stock and staff for when people come to spend them, or whether your gift cards are even worth the effort.

Not every card gets spent, either. According to VoucherCart, only 85% of vouchers are redeemed on average. But until a card is redeemed or expires (and in Australia, that’s at least three years), that money isn’t really yours, as you still owe it to customers in products or services. Your accountant will usually treat it as a liability until the card is redeemed, so keeping clear records makes end of the financial year much simpler and stops you from counting money you’ve already promised to someone else.

So how do you keep track? The easiest way is to sell and redeem every gift card through your POS, rather than with paper vouchers or a separate system. That way, each card has its own unique code, and every sale, top-up, and redemption is recorded automatically, so you can see your outstanding balances at any time. With an Epos Now POS system, the VoucherCart integration does exactly that, tracking gift cards sold in-store and online in one place. From there, it’s worth checking your gift card reports once a week over the festive season and sharing them with your accountant, so your books stay accurate.

Once that’s set up, it’s also worth keeping an eye on:

• When cards are being redeemed: If most of your gift cards are spent in the first two weeks of January, you’ll want plenty of stock and staff ready.
• How much people spend on top: This tells you how much extra revenue your gift cards are really bringing in.
• Which values and formats sell best: If your $25 cards fly out and your $100 ones don’t, you’ll know what to focus on next year.

And when it’s time to look back on the season, our guide to the 8 functional reports you can generate in Epos Now shows you how to pull your sales figures together.

Step 5: Be ready for the January rush

Here’s a word of warning: Christmas Day isn’t the end of your gift card season; it’s actually where it all starts – so prepare accordingly! Once the presents are unwrapped, all those cards start heading back through your door, often during the Boxing Day sales or the New Year.

Gift card shoppers are usually after something brand new and full price rather than whatever’s left over in the sale, so make sure you’ve got plenty of your popular lines in stock. Our guide to inventory forecasting can help you work out how much you’ll need, and for more on the post-Christmas rush, take a look at our guide to preparing for the Boxing Day sales. You’ll likely see plenty of returns and exchanges at the same time, so it’s worth having a clear holiday returns policy in place, too.

Don’t forget the best part, though: gift cards are an excellent opportunity to make a brand new regular. This January, make sure to really crank up those warm welcomes, as it’s an excellent opportunity to really let your shop shine!

Wrapping up your gift card strategy

For the little effort involved, gift cards are a bit of a no-brainer. You get the money in December, last-minute shoppers have something to buy, and a lot of those cards get spent in January, when trade is usually slower.

Just don’t treat them as an afterthought. Set things up now, put the cards somewhere customers can see them, and keep track of what you’ve sold. Then when someone at the register can’t decide, you can point them to a gift card.