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16 Apr 2025

Increase Your Gift Card Sales with Our Loyalty Program Insights

In today’s competitive business landscape, customer retention is key to long-term success. One effective way to boost retention and increase sales is by integrating gift cards into your loyalty program. A well-structured loyalty program not only rewards customers for their repeat business but also provides an excellent opportunity to drive sales of gift cards. The combination of loyalty points and gift cards can be an effective strategy to attract and retain customers while enhancing their lifetime value.

Why Loyalty Programs Are a Great Fit for Gift Cards

Loyalty programs are designed to incentivize customers to return to a business by rewarding them for repeat purchases, typically through points that can be redeemed for discounts, free products, or other rewards. Gift cards, on the other hand, are a flexible, high-value incentive that customers love, especially when they can redeem them for items or services, they need or desire.

When these two elements are combined, businesses can enhance their loyalty programs, encourage higher spending, and boost gift card sales. According to recent surveys, nearly 40% of consumers have cashed in their loyalty points for a gift card purchase, demonstrating the rising trend of using loyalty rewards for gift cards. This indicates that businesses should consider integrating gift cards into their loyalty programs to tap into this growing demand.

Benefits of Leveraging Loyalty Programs for Gift Card Sales

1. Increased Customer Engagement and Retention

Loyalty programs are known for fostering long-term relationships with customers. When customers can redeem their points for gift cards, they are more likely to stay engaged with the program. In fact, 36% of consumers say receiving a merchant gift card in exchange for loyalty points would keep them engaged in a loyalty program. By offering this benefit, businesses can ensure that customers keep coming back to earn and redeem their points, which directly drives sales.

Additionally, reward-based programs can create an emotional connection with your customers. According to a study, 61% of customers say the most important way a brand can interact with them is to surprise and reward them. Gift cards, especially when linked to loyalty points, provide a perfect way to do this.

2. Increased Spending and Customer Lifetime Value

Integrating gift cards into your loyalty program can increase both the average order value and customer lifetime value. Studies show that 82% of consumers are motivated to make a purchase in order to earn a gift card. This means that offering gift cards as part of your loyalty program encourages customers to spend more in order to hit the reward threshold, ultimately driving additional revenue.

Furthermore, 73% of shoppers tend to spend more with a brand after receiving a gift card. This is a clear indication that gift cards have a strong psychological impact on customer spending. Once customers have earned a gift card, they are more likely to return and use it, often exceeding the card’s value by making additional purchases.

3. Appeal to a Larger Audience

Gift cards are universally appealing, and when combined with loyalty points, they offer customers a tangible reward that can be easily used for future purchases. A recent survey found that customers purchased two gift cards in the past 12 months on average because loyalty or rewards points were offered. This statistic highlights that businesses offering gift cards as part of their loyalty programs can tap into a growing consumer desire for flexibility in their reward options.

Loyalty programs that include gift cards also appeal to a broader audience. With 14% of U.S. shoppers exchanging loyalty points for gift cards, it’s clear that gift cards are becoming a preferred reward choice. Additionally, many consumers are more likely to choose one loyalty program over another if it’s easier to use, with 56% of consumers saying they prioritize ease of use when selecting loyalty programs.

4. Improved Customer Loyalty and Brand Preference

Gift cards can also help businesses build brand preference. A strong loyalty program combined with attractive gift card incentives can influence a customer’s decision on where to shop. In fact, four out of five consumers say they’ve decided where to shop based on gift card loyalty incentives at least once, with 16% indicating they “always” consider these incentives when making their shopping decisions.

By offering gift cards as part of your loyalty rewards, you not only encourage customers to return but also position your brand as one that values its customers’ loyalty. This fosters long-term relationships and creates a competitive edge in the marketplace.

Strategies to Implement Gift Card Promotions within Your Loyalty Program

1. Tiered Loyalty Programs with Gift Card Rewards

One effective way to integrate gift cards into your loyalty program is by offering tiered rewards. For instance, customers can accumulate points at different rates depending on their level in the loyalty program, and as they reach higher levels, they become eligible for higher-value gift cards.

2. Gift Card Redemption for Loyalty Points

Allow customers to exchange their loyalty points for gift cards. This can be particularly effective for businesses that sell a wide variety of products or services. Offering gift cards as a redemption option gives customers the flexibility to choose how they spend their rewards.

You could also allow customers to redeem their points for gift cards in different denominations, so they have more control over the value of their rewards. This flexibility can increase customer satisfaction and engagement.

3. Limited-Time Gift Card Promotions

Creating time-sensitive offers for gift cards within your loyalty program can add an element of urgency and encourage customers to act quickly. For instance, you can offer double points for every dollar spent during a limited time promotion or offer a bonus gift card for customers who reach a specific loyalty tier within a set period.

By creating urgency, you can increase short-term sales while also enhancing the long-term effectiveness of your loyalty program. This type of promotion encourages customers to return to your store or website to redeem their rewards before the offer expires.

4. Surprise and Delight Offers

As part of your loyalty program, offer surprise gift cards to customers who have been particularly loyal or made significant purchases. This “surprise and delight” strategy is proven to strengthen customer loyalty.

You can randomly select customers to receive gift cards as part of a surprise offer. These unexpected rewards can create a positive emotional connection with your brand, motivating customers to return for more.

Incorporating gift cards into your loyalty program is an excellent way to drive sales, boost customer engagement, and increase retention. By offering gift cards as rewards for loyalty points, businesses can motivate customers to spend more, redeem their points, and return for repeat purchases. Whether it’s through tiered rewards, redemption options, or limited time offers, the synergy between loyalty programs and gift cards can help you maximize your customer relationships and increase revenue.

About Plasticard – Locktech International

PLI is the largest Closed Loop Gift, Loyalty and Hospitality card manufacturer in North America. PLI has been in business for over 30 years, specializing in end-to-end card marketing solutions including card production, design, packaging, displays, consulting and fulfillment services and capabilities. PLI has three manufacturing facility locations including two in Las Vegas, NV and one in Asheville, NC.

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