Gift Card

Gift Card (also known as a gift certificate or gift voucher) is a prepaid payment instrument that holds a specific monetary value and can be redeemed during checkout in place of—or alongside—other payment methods. In eCommerce, gift cards are typically issued as unique alphanumeric codes that a recipient enters at checkout to apply a credit toward their order total.

Gift cards serve two key roles in online retail: they act as a customer acquisition tool (bringing new shoppers to the store) and a revenue driver (since a portion of gift card balances often goes unspent—known as breakage). They also simplify gift-giving by removing the guesswork of choosing the right product.

How gift cards work in eCommerce

A typical gift card lifecycle involves several stages. First, the purchaser buys a gift card for a set denomination or a custom amount. The store generates a unique code and associates it with the purchased balance. The purchaser (or the store) delivers the code to the recipient—via email for digital cards, or inside physical packaging. When the recipient shops, they enter the code at checkout, and the system deducts the order total (or as much as the balance allows) from the card. Any remaining balance stays on the card for future use.

Types of gift cards

  • Digital (eGift) cards – delivered electronically (email, SMS, messaging apps). Instant delivery, zero shipping cost.
  • Physical gift cards – tangible cards (plastic or paper) with a printed or embedded code. Often sold in-store or shipped.
  • Open-loop cards – usable at multiple merchants (e.g., Visa or Mastercard gift cards). Rarely issued by individual stores.
  • Closed-loop cards – redeemable only at the issuing store or brand. The most common model in WooCommerce.

Gift cards in WooCommerce

WooCommerce does not include gift card functionality in its core. Store owners typically add it through dedicated plugins (e.g., PW WooCommerce Gift Cards, YITH WooCommerce Gift Cards, or custom solutions). These plugins register a special product type, generate unique codes on purchase, handle balance tracking, and integrate with the checkout flow to allow code redemption.

Key considerations for store owners

  • Accounting: Gift card sales are recorded as liabilities (deferred revenue) until redeemed—not as immediate income.
  • Expiration laws: Many jurisdictions restrict or prohibit gift card expiration dates and inactivity fees.
  • Fraud prevention: Gift cards are a common target for scammers. Implement velocity checks, CAPTCHA on purchase, and monitoring for bulk buys.
  • UX: Make it easy to check balances, resend codes, and apply cards at checkout without friction.