Setting up gift cards on Shopify

Shopify has gift cards natively. Selling them is straightforward; the parts worth thinking about are how they're delivered, what they do to your reporting, and how your accountant wants them treated.

Two ways they exist

Gift card products are sold to customers. Create a product, mark it as a gift card, and give it denominations as variants — £25, £50, £100. On purchase, Shopify issues a code and emails it to the recipient.

Issued gift cards are created by you from the admin, for refunds, goodwill or compensation. No sale, no revenue, just a balance you've granted.

The second is genuinely useful for customer service. A goodwill gift card retains a customer where a refund loses one — and it costs you the same on paper.

Digital delivery

The default. The recipient gets an email with the code and a link to their balance. Two things to check:

• Edit the gift card email template under Settings → Notifications. The default is functional and impersonal, and this email is a gift being delivered — it's worth ten minutes.
• Test it. Buy one, on a phone, and read what arrives. This is on the launch checklist for anything customer-facing.

Let the buyer set a recipient email and a message if your setup allows it, and schedule delivery for a date. "I bought it on the 3rd and it arrived on the 3rd" is a poor gift experience for a birthday on the 20th.

Physical gift cards

If you sell physical cards in a shop or by post, you can create the codes in bulk from the admin and print them. Two notes:

• Bulk-created cards are live immediately unless you handle activation. A stack of live cards in a shop is cash sitting on a shelf.
• Physical cards need POS to redeem them in store, and the balance is shared with online.

Expiry and balances

Whether gift cards can expire depends on where you operate — many jurisdictions restrict or prohibit it. Check before setting an expiry date; this is a legal question, not a preference.

Balances are partial-use by default: a £50 card spent on a £30 order leaves £20. Make sure your theme and your emails communicate the remaining balance, or you'll field the question.

The accounting treatment

This is the part that catches people out and it's worth raising with your accountant before you sell any.

A gift card sale is generally not revenue. It's a liability — you've taken money and owe goods. Revenue is recognised when the card is redeemed.

Practically that means:

• Gift card sales and gift card redemptions need to map to different accounts.
• Your Shopify sales figures and your accounting revenue will legitimately differ.
• Unredeemed balances are an ongoing liability, and there may be rules about what happens to them eventually.

Get the mapping right in your accounting integration rather than discovering it at year end.

What they do to reporting

Two effects worth knowing:

• Sales are inflated on issue if you count gift card sales as revenue.
• Orders paid by gift card show reduced revenue, because the money arrived earlier.

Neither is a problem; both cause confusion when someone compares two reports. Decide which figure your business uses and be consistent — the same discipline as any reporting definition.

Fraud

Gift cards attract fraud because they're liquid. Two sensible controls: don't let a gift card be bought with another gift card, and watch high-value gift card purchases in the fraud analysis before they're delivered — the same caution as digital products.

Worth doing?

For most stores, yes. Gift cards bring new customers at no acquisition cost, they're bought at full price, and a proportion of the balance is typically never redeemed. The setup is under an hour.

The only genuine reason to skip them is if your accounting can't handle the liability treatment — and that's a reason to fix the accounting.

Gift cards are the rare feature that's cheap to add, brings new customers, and needs one conversation with an accountant before you switch it on.