The holiday shopping season may be winding down, but for marketing leaders in retail and hospitality, the work is just beginning.
Gift cards are again a top choice for holiday shoppers. According to an International Council of Shopping Centers survey, two-thirds of U.S. consumers planned to buy gift cards for the 2025 holiday season, up six percentage points over last year. They’re practically split three ways on gift card preferences between bank-issued, restaurant and department store – with restaurant gift cards coming in slightly more popular.
That means thousands of potential new customers are engaging with brands for the first time, armed with prepaid value and expectations. How retail and hospitality brands (chain and locally owned) in particular engage these consumers post-purchase is a critical opportunity to extend holiday momentum into Q1 sales and year-round loyalty.
Here are three strategic recommendations to maximize gift card redemptions and convert first-time shoppers or casual recipients into committed future buyers.
- You’re On! Treat Redemption as Your Debut, Not a Final Step
The customer that walks through your door (or clicks online) to redeem a gift card is there for more than a transaction. Use the moment to shine! Turn a one-time gift giver’s intent into a long-term customer relationship. Don’t go the way of some merchants who drop the ball with confusing processes or unclear terms.
Best Practices:
- Streamline Omnichannel Redemption: Make it seamless to redeem gift cards both online and in-store, especially for new customers unfamiliar with your brand.
- Cross-Train Staff Post-Holiday: We at Dorsey & Company have long believed that one of the most important markets is internal. Ensure team members can resolve gift card issues swiftly; after all, these new guests are high-potential leads.
- Profile and Engage: Use POS data to identify and segment redeemers. They’re referred, prepaid and primed for your marketing messaging.
- Launch “New Year, New Guest” Campaigns
A smart post-holiday plan doesn’t just manage redemptions; it mobilizes them.
Key Tactics:
- Exclusive Gift Card Events: Host in-store or online “Gift Card Redemption Days” (that you control, by the way) with bonus offers or special gift-card-only promotions.
- Reactivation Incentives: Follow up with redeemers via email or SMS with targeted offers; e.g. “Spend your last $10, get $5 more.”
- Segment by Purchase Behavior: Tailor future outreach based on data collected in step 1.
- Minimize Burden, Maximize Margin
Gift cards should fuel growth, not burden your operation.
Operational Wins:
- Steer Toward Digital-First: Encourage e-gift cards in future campaigns to reduce reconciliation time and boost customer and staff convenience.
- No Surprises: Clarify policies up-front. Make redemption terms transparent and consumer-friendly to avoid costly customer service issues that can harm brand reputation.
- Pick up Crumbs from Breakage Strategically: While un-redeemed balances shouldn’t be your goal, they’re still part of your revenue equation. Be sure to track and report breakage with intention.
Why It Matters Now
Ending 2025 in the black should not be the only goal. Starting Q1 on a positive note can give retailers a strong lift, depending on how they leverage post-holiday activity. When deployed and tracked strategically, gift cards offer one of the clearest bridges between seasonal traffic and sustained loyalty.
Don’t treat gift cards as simply closed books for 2025. Treat them as new customer journeys with your brand.
Tell us: How will you activate the gift card value you’ve earned this shopping season to start jump-start 2026 earnings?