What is PayPal Gift Card and How Can it Grow Your Online Store?

Online businesses are increasingly offering gift cards to customers. The global gift card market is expected to reach $1.4 trillion by 2026. Making it-to-ground gift cards can be your ideal marketing strategy for your online store. However, having an own gift card program is only viable for merchants with considerable capital to build the platform.

What if you can create gift cards with your brand? Wouldn’t you go for it?  And PayPal enables you to create gift cards for your brand with minimal charges compared to other gift card providers.

This blog will explain everything about the PayPal gift card and also how to use PayPal gift card to grow your online business. Keep reading to know how you can benefit

What is a PayPal gift card?

Think of a PayPal gift card as a digital card, not a physical one, and you can create one with a certain amount of cash value and let your customers avail when they make purchases on your website. As you’re running an online store, you can create PayPal gift cards using the PayPal account and distribute them to customers.

PayPal gift cards allow you to create digital certificates by using existing design templates on the platform with your brand name.  It lets you create your own gift cards for your online business and track them in your PayPal account.  Customers can only purchase your products and services using the gift cards you create. Whenever a customer purchases using your gift card, the amount will be deducted from your PayPal account, including the transaction charges.

Once you create gift cards on PayPal, your brand will be listed on the PayPal website and its partner marketplaces, such as Facebook. The potential customers can see your brand's gift card, thus increasing the chance of buying your goods and services.

Gift Cards and Endowment Effect

Consumers consider promotions such as coupons, cart discounts, and voucher discounts as sales promotion gimmicks. However, in the case of gift cards, the endowment effect influences people to use them. To understand the endowment effect better,  think of the reciprocation you would get when you gift something to your dear ones or friends. It’ll create a bond, trust, and the same reciprocation towards you. The same will happen if you present gift cards to your customers.

In business, presenting customers with your gift cards is an investment in building a long-lasting relationship with them. It makes them feel that they owe something back to you.  Ultimately, it drives people to think of gift cards as free cash; not using them would be a waste of money.  Customers are inclined to use gift cards to make a purchase more than other sales promotions. Hence, a gift card program using PayPal for your online store is an ideal marketing strategy for growing your business. 

How to create PayPal Gift Cards for your Brand?

To use PayPal to create your brand’s gift card, you need to have a business account on the platform. Also, you need to register your brand on PayPal. If you don’t have a business account, you can easily register, and the registration process is free of cost.

•  Go to PayPal Gift Card and complete your registration. 

• Once you complete the registration process with the required details, you will see a PayPal gift card dashboard.

• You can create cards for your brand and customize the amount.

How PayPal Gift Cards Help Your Business?

 Brand Recognition

Gift cards as a marketing strategy got the attention of major companies.  Look at a few key companies listed below from the Global Gift Cards Market Research Report 2022.  

• Amazon

• Walmart

• iTunes

• Google Play

• Starbucks

• Virgin

• IKEA

• H&M

• Zara

Even though they are well established, they rely on gift cards as one of their marketing strategies. We can infer that a gift card program for an online store will significantly increase brand visibility.

When you create gift cards using PayPal for your online store, it'll list your brand on the PayPal website. Millions of people visit the PayPal website, and having your online store listed on a famous platform like PayPal would help your business to acquire new customers.

Marketing costs a fortune to get new customers than to retain old ones. When new customers get your gift card, they’ll visit your website, and there is a high chance of making a purchase. Also, they would talk about your gift card to others as well. And, when an existing customer gets your gift card, it'll increase customer retention and loyalty.

Increases Sales Margin

Customers who use gift cards are inclined to purchase products with a high margin. The endowment effect drives people to think they already have free money, making them buy new products with high margins rather than discounted ones.

Moreover, using PayPal gift cards gives a competitive edge to running your online store. While you have a gift card program for your brand, if your peer competitors lack the same, it’ll make you stand out in your space.  

You Pay Only When Gift Card is Redeemed.

Let us assume you created gift cards shared with 100 customers. All 100 customers will not redeem the gift card in your online store. At least 10% of customers will not redeem the gift card at all. The deducted amount will be credited to your account when a customer completes the purchase. So, you will only pay a small amount to PayPay for transaction charges.  Additionally, PayPal will deduct the money from your account only if the customer redeems the gift card.

For example, you’re running an offer campaign of 20 % offer on products from their original price. Though it drives sales effectively, you’ll lose $20 for a product worth $100. Instead, if you give a $10 gift card to a customer, there’s a high chance of buying the same product for $90.

Let us do the math, as you’ll pay only for the PayPal transaction charges and get more revenue than giving a discount offer on your products.

Track Customer Behavior

Understanding customer behavior plays a crucial role in the marketing sphere. Having factual data on their behavior lets you devise marketing strategies, from choosing the products in demand to making investment plans for marketing efforts.

PayPal tracks all the gift cards you have created and keeps the data whenever a customer redeems it. You can analyze the records to understand how your gift card strategy performs and make changes based on the insights that PayPal offers.

For example, if a group of customers redeems the gift card to buy a particular product, you can understand that there’s great demand for those products. So, you can go for discount offers for in-demand products and gift card strategies to increase sales for other goods.

Strategies to Implement Your PayPal Gift Card Program

Focus on Your Gift Card Design

The PayPal Gift cards you create should reflect what your business stands for and its values. At the same time, you must make it thoughtful and personal for the customers. Eventually, It's a gift, isn't it?  

• PayPal allows you to use your design to create digital cards. While creating a design for your gift card, make sure the color scheme and fonts are consistent with your brand because they’ll portray the brand's emotion.

• Also, sticking to the same design will not help in the long run. You can create designs based on the holiday seasons, such as Christmas, Thanksgiving, and more. Online sales will skyrocket during the holiday season. So, creating theme-based designs and well-crafted marketing slogans for your gift card designs would boost your sales.

Promote your gift cards online

Spread the word on your website, your social accounts, and other marketing channels about your gift card program. PayPal also promotes your gift cards on its partner channels like Facebook. It's an added advantage of using PayPal gift certificates. You can run poll and quiz campaigns to increase customer engagement with your brand. You can use that space to sell your cards.

Encouraging Customers to Use Your Gift Card

You’ll need more than just gift cards to motivate customers to buy products in your store. It would be best if you had strategic plans to make them buy and use your gift cards.

• You can offer gift cards to shoppers along with their purchases when they buy more than a certain threshold amount suitable to your business.  This will drive them to use the gift card on their next purchase. Also, this will increase the number of customers returning to your store.

• People love to present gift cards to their dear ones on special occasions. You can sell your gift cards at an incentive price, like selling a $50 worth of gift card for $40. Getting gift cards for less than their actual value would inspire people to buy your gift cards.

• If a person returns a product, you can give him the option to get a refund as a gift voucher. This way, you keep the amount and let them return to your store.

• Strategic partnerships with other brands help reach a wider section of people. You can let other brands give your gift cards while customers purchase products on their brand. Vice versa, you can give other brands’ gift cards for any purchase on your online store.

• Nowadays, corporates tend to present gift cards to their employees during special occasions as a token of appreciation. You can tie up with corporates and sell your gift cards at an incentive price. This will motivate their employees to become your customers.

Make use of fundraising events.

In fundraising events, you give your products gift-wrapped to organizers and will not know to whom you presented the gift. A random person from somewhere will get the product.  However, your business will not get fair value for participation. Instead, you can give your eloquently designed gift card in an elegantly wrapped-up box. Whoever got your gift card will become your customer when they use it. It’s a win-win situation for you and the gift recipient. 

Make Customers Your Brand Evangelists

Create a reward program for your customer to refer your brand to others. On PayPal, you can create a referral link that your customers can share with others. You can reward the person with a gift card whenever you get a new customer through his referral link. 

For entrepreneurs, PayPal gift cards are like a key that opens the gates of increased revenue, customer engagement, loyalty, and retention for your brand with less effort. As being a cost-effective marketing strategy, there won’t be any slashing on your profit. There is an aggressive market expansion for the gift card market, which can potentially turn the tides in your favor. Use it as a game changer to take your business ahead of competitors’ curve by implementing the right strategy for your gift card program.

When you go for the PayPal gift card program, you may need to update these gift card transactions in QuickBooks. When copious data needs to be filled in QuickBooks manually, you or your accountant may buckle yourselves under pressure.  As automation stretches its hands worldwide, If you are searching for a tool that automatically syncs the transactions from PayPal to QuickBooks, check out  PayTraQer.  With PayTraQer, not only PayPal but also you can sync transactions from other platforms, such as Shopify, Amazon, Stripe, and so on, in to QuickBooks.

If you want to know more on how to verify PayPal, Read - How to Verify a PayPal Account?