Gift Cards Are Your Highest-Margin Product
Gift cards have zero manufacturing cost, zero shipping cost for virtual cards, and virtually zero return risk. The margin is effectively 100 percent. Yet most Magento 2 stores either do not offer gift cards at all or rely on a clunky, manual process that frustrates customers.
The upside goes beyond the sale itself. Research from First Data found that 60 to 70 percent of gift card recipients spend more than the card's face value when they shop. That overspend is pure incremental revenue you would not have captured otherwise. During the holiday season from November through January, gift cards can account for more than 40 percent of annual gift card revenue, making them a critical fourth-quarter driver.
If you run a Magento 2 store and you are not selling gift cards or you are managing them through workarounds like coupon codes and manual spreadsheets, you are leaving money on the table. A proper gift card program gives you automated code generation, balance tracking, partial redemption, and email delivery built directly into your checkout flow. Let's walk through how to build one that works.
Types of Gift Cards for Magento 2 Stores
Before you configure anything, decide which gift card format suits your store. Each type serves a different customer need and fulfillment workflow.
Virtual Gift Cards (Email Delivery)
Virtual gift cards are delivered by email, either immediately after purchase or on a scheduled date chosen by the buyer. They are the fastest format to set up because there is no physical fulfillment. A virtual gift card includes a unique code, the card balance, an optional personal message from the buyer, and a customizable design template branded to your store.
This format works best for last-minute shoppers and digital-only stores. If you sell downloadable products, software, or online services, virtual gift cards should be your primary offering. They also reduce your operational overhead since there is nothing to print or ship.
Physical Gift Cards
Physical gift cards are printed cards shipped to the recipient's address. Each card carries a printed gift card code that the recipient enters at checkout. Physical cards work well for stores with a brick-and-mortar component, luxury brands where the tactile unboxing experience matters, or seasonal gifting occasions where handing someone a physical item feels more personal than an email.
The tradeoff is fulfillment. You need to generate the code, print it on the card, and ship it, which adds lead time and cost. If you already ship products, the integration is straightforward. If you are a digital-only store, physical cards may not justify the logistics.
Combined (Virtual and Physical)
The combined approach lets the buyer choose the delivery method at purchase. Some customers want the instant gratification of an email delivery; others want a physical card to hand over at a birthday dinner. Offering both options gives you maximum flexibility and captures sales you would otherwise lose by forcing a single format.
Most stores that take gift cards seriously eventually settle on the combined approach. It requires a bit more configuration but the revenue upside makes it worthwhile.
How to Set Up Gift Cards in Magento 2
Setting up a gift card program in Magento 2 involves eight steps. Each one builds on the previous, so work through them in order.
Step 1: Decide on Gift Card Amounts
Choose between fixed denominations like $25, $50, and $100, or custom amounts where the buyer enters any value within a range you define, for example $10 to $500. Fixed denominations simplify your catalog and are easier to promote. Custom amounts give buyers more flexibility, which can increase the average card value. You can also offer both simultaneously.
Step 2: Configure Code Generation
Your gift card codes need to be unique, hard to guess, and optionally branded. The extension's settings live under Stores > Configuration > Sales > Gift Card. Set Enable Gift Card to Yes, then define the Code Format (alphanumeric, numeric, or alpha-only), set the Gift Card Code Length (a positive integer, validated on save), and add an optional Code Prefix like GIFT- or your store name. On generation the extension builds a code from the prefix plus random characters of the chosen format and length, then checks it against every existing card so duplicates are impossible. Because the section is showInWebsite="1" and showInStore="1", you can override format, length, and prefix per website or store view from the scope switcher at the top-left of the page.
Step 3: Set Up Delivery Options
Configure how cards reach recipients. The Email Template field (a dropdown of registered transactional templates, with a sender configured through the standard Email Sender backend model) controls the message that carries the code to a recipient. For virtual cards this template includes your branding, the gift card code, the balance, and the buyer's optional personal message. When you generate a card in the admin you can fill in Recipient Email, Recipient Name, Sender Name, and a Message, all of which are stored on the card record and merged into that email.
For physical cards, generate the card, print the resulting code, and let the printed card enter your standard shipping and fulfillment process.
Step 4: Enable Balance Management and the Storefront Balance Page
Customers need a way to check their remaining balance, and you need to view and adjust balances from the admin. MageRa Gift Card ships a dedicated storefront balance-check page at /giftcard/frontend/balance (the route's frontName is giftcard). The shopper opens that URL, enters a code in the form, and submits it. The form posts by AJAX to giftcard/frontend/checkBalance, which looks the card up by code and returns the current balance and the card status (for example Enabled) — or a friendly "No gift card was found for that code" message when the code is invalid. If the extension is disabled, the balance page simply redirects to the homepage.
On the admin side, go to Marketing > Gift Cards > Manage Gift Cards (controller path giftcard/giftcard/index). The grid lists every card with its code, balance, initial balance, status, and recipient details, and each row links to an edit screen where you can adjust the balance or status. Every change — creation, redemption, adjustment — is written to a transaction log, so the card's full redemption history is always visible.
Step 4b: Generate Cards from the Admin
To issue a card by hand (for store credit, a refund, or a promo), open Marketing > Gift Cards > Manage Gift Cards and click Add New Gift Card. Enter a Balance (must be greater than zero) and, optionally, a Customer, Recipient Email/Name, Sender Name, and Message. On save the extension auto-generates the code using your Step 2 settings, sets the status to Enabled, applies the Gift Card Lifetime as an expiry date if one is configured, records a "created" transaction at the full balance, and shows you the new code in the success message. The same operation is available programmatically through the protected POST /V1/giftcard/generate endpoint described later.
Step 5: Configure Partial Redemption
Partial redemption means a customer can use part of their balance and save the rest for later. If someone has a $100 card and spends $60, the remaining $40 stays on the card automatically. Without partial redemption, customers either spend the full amount in one transaction or lose the remaining value, which creates a poor experience and can run afoul of consumer protection regulations in some jurisdictions.
Step 6: Set Expiration Rules
Decide whether your gift cards expire. MageRa Gift Card lets you set the Gift Card Lifetime (Days) — the number of days after purchase before a card expires (for example, 365 days) — or leave it unset for no expiration at all. Be aware that expiration laws vary significantly by region. Many US states prohibit expiration on store gift cards, while other jurisdictions allow it with disclosure requirements. Check your local regulations before enabling any expiration policy.
Step 7: Design the Gift Card Product Page
Your gift card product page should feel like a premium product, not an afterthought. Add preview images showing what the card looks like, a delivery date picker for virtual cards, personalization fields for the buyer's message, and denomination selectors. The better the product page looks, the more confident buyers feel about purchasing.
Step 8: Test the Full Flow
Before going live, walk through the complete lifecycle. Purchase a card and verify the email delivery or shipping integration. Then redeem it: on the cart page a customer enters the code in the gift card field, which posts to giftcard/frontend/apply. The controller pulls the active quote from the checkout session and calls applyGiftCard, then shows a success or error message and returns to Checkout Cart. A removal link posts to giftcard/frontend/remove to clear the card from the quote. Confirm partial redemption (a $100 card against a $60 order leaves $40), confirm a card can be reused across multiple orders, check the /giftcard/frontend/balance page, and verify the Manage Gift Cards grid shows the matching transaction history. Catch issues before your customers do.
Key Features of MageRa Gift Card for Magento 2
MageRa Gift Card gives you everything you need to run a professional gift card program without patching together multiple tools or custom development.
Screenshot of the MageRa Gift Card admin configuration panel in Magento 2
Auto-Generated Unique Codes: Every gift card receives a unique code. You control the format, length, and character pool. The system prevents duplicates so you never have two cards with the same code.
Flexible Code Formats: Choose alphanumeric codes for maximum entropy, numeric-only codes for compatibility with point-of-sale systems, or alpha-only codes for readability. Add a custom prefix like STORE- to reinforce your brand with every redemption.
Custom Amount Support: Offer fixed denominations, a custom amount range, or both. Let customers pick any value between your defined minimum and maximum.
Balance Management: Customers check their balance on a dedicated storefront page. Admin users view all active cards, current balances, and full transaction history from the Magento 2 admin panel.
Partial Redemption: Card balances carry over automatically after each use. A $100 card used for a $60 order retains $40 for the next purchase. No lost value, no frustrated customers.
Multiple Redemptions: A single gift card can be used across multiple orders until the balance is exhausted. This mirrors how customers expect gift cards to work.
Automatic Email Delivery: Virtual gift cards are sent automatically via email. You customize the template with your branding, and buyers can schedule delivery for a specific date.
Customizable Email Templates: Design gift card emails that match your store's look and feel. Include the card code, balance, buyer's personal message, and your logo.
Optional Expiration: Set the Gift Card Lifetime in days after purchase, or disable expiration entirely. Configure it once and the system handles the rest.
Screenshot showing the gift card product page on the Magento 2 storefront
REST API for Gift Card Integration
If you operate a point-of-sale system, a mobile app, or any third-party tool that needs to interact with your gift card program, MageRa Gift Card exposes a full REST API.
Generate a Gift Card (admin token, MageRa_GiftCard::manage resource):
POST /rest/V1/giftcard/generate
{
"balance": 100.00,
"customerId": 1,
"lifetimeDays": 365
}This endpoint creates a new gift card with the specified balance and optional expiration. The response returns the generated code. The companion POST /V1/giftcard/redeem endpoint, also under the manage resource, debits a card from a back-office or POS workflow.
Validate a Gift Card (authenticated customer token):
POST /rest/V1/giftcard/validate
{
"code": "GIFT-A3X9K2M7"
}Check whether a code is valid, active, and has a remaining balance before applying it. This route requires a logged-in customer token rather than anonymous access, which prevents code enumeration and balance disclosure.
Apply a Gift Card to a Cart:
POST /rest/V1/giftcard/apply
{
"cartId": 123,
"code": "GIFT-A3X9K2M7"
}Apply the gift card balance to a specific cart. If the order total is less than the card balance, the remainder stays on the card for future use. A DELETE /V1/giftcard/remove/:cartId route removes an applied card from the cart.
Check Gift Card Balance (authenticated customer token):
POST /rest/V1/giftcard/balance
{
"code": "GIFT-A3X9K2M7"
}Retrieve the current balance for a gift card. Like validate, this is a POST route restricted to a logged-in customer token so balances cannot be harvested anonymously. A GET /V1/giftcard/customer/:customerId route lists all cards tied to a customer.
These endpoints let you integrate gift card creation and redemption into any workflow. For example, you could auto-generate gift cards as store credit when processing refunds, or let customers buy and send gift cards from your mobile app without touching the Magento 2 admin panel.
MageRa Gift Card for Magento 2
MageRa Gift Card is built specifically for Magento 2.4.6 through 2.4.9, running on PHP 8.1, 8.2, or 8.3. It integrates directly with Magento's checkout, customer, sales, and quote modules, so gift cards work as a native payment method at checkout rather than a hacky workaround.
Key differentiators:
- No external dependencies beyond MageRa_Base and MageRa_AdminUi, which are included with any MageRa extension
- Gift cards function as a real payment method in the checkout flow, not a coupon code that breaks discount stacking
- Partial redemption and multiple redemptions work out of the box with no custom code
- The REST API enables integration with POS systems, mobile apps, and third-party tools
- Compatible with both Magento Open Source and Commerce editions
For pricing, visit magera.ca.
Pair MageRa Gift Card with MageRa Reward Points to create a complete loyalty ecosystem: gift cards drive new customer acquisition while reward points drive repeat purchases from existing customers.
5 Gift Card Selling Strategies
Having the technical setup is half the battle. The other half is making sure customers actually find and buy your gift cards. Here are five strategies that consistently drive gift card revenue.
Feature Gift Cards Prominently During Peak Season
From October through December, gift card demand spikes. Add gift cards to your homepage hero banner, include them in your main navigation, and send email campaigns promoting them as the easy gifting solution. Do not bury them in a subcategory. Treat gift cards as a top-level product during the holiday season.
Offer Gift Cards as a Fallback on Out-of-Stock Pages
When a product is sold out, show a message like: "This item is currently unavailable. A gift card lets them choose later and ensures they get exactly what they want." You turn a lost sale into a deferred sale and the customer gets a positive experience instead of a dead end. This strategy works especially well for popular items that restock periodically.
Send Gift Card Reminders to Past Buyers
If a customer bought a gift card last year for Mother's Day, send them a reminder the following year: "Mother's Day is coming. Last year you sent a gift card. Want to send one again?" This is one of the highest-converting email campaigns you can run because the recipient has already demonstrated intent and the reminder removes decision friction.
Bundle Gift Cards with Product Purchases
Offer a promotion like "Spend $100 or more and get a $20 gift card free." This drives immediate revenue from the qualifying purchase and guarantees a return visit when the recipient redeems the gift card. You acquire the initial sale and the follow-up sale from a single promotion. It works particularly well during slower months when you need to stimulate demand.
Use Gift Cards for Store Credit Instead of Cash Refunds
When customers request a return, offer a gift card for the refund amount instead of cash. You keep the revenue in your store and guarantee a return visit. Many customers prefer the instant store credit over waiting for a credit card refund to process. This strategy reduces the net cost of returns while maintaining customer satisfaction.
If you are looking to streamline the checkout experience for gift card redemption, check out our guide to One Step Checkout for Magento 2, which reduces checkout friction and pairs well with gift card payments.
Conclusion
Gift cards are pure profit with built-in upsell potential. They cost nothing to produce, drive incremental revenue when recipients overspend the card value, and give you a powerful tool for promotions, store credit, and customer retention. Most Magento 2 stores underutilize them.
A proper gift card program needs flexible formats (virtual, physical, or both), auto-generated unique codes, partial redemption so no value is lost, balance management for transparency, automated email delivery, and a REST API for third-party integration. MageRa Gift Card delivers all of this in a single extension that integrates natively with Magento 2's checkout flow.
Ready to add gift cards to your Magento 2 store? MageRa Gift Card supports virtual and physical cards, partial redemption, custom denominations, and full REST API integration. Visit magera.ca/magento-2-gift-card.html to get started.
If you run a B2B operation alongside your retail store, the Complete B2B Extension Package for Magento 2 adds wholesale pricing, company accounts, and catalog permissions that work seamlessly with gift cards.
FAQ
Q1: Can customers use a gift card for partial payment and pay the rest with a credit card?
Yes. MageRa Gift Card supports split payments at checkout. A customer can apply their gift card balance first and pay the remaining amount with any other payment method configured in your store. The unused balance stays on the gift card for future orders. This means a customer with a $50 card buying a $75 product applies the card and pays the remaining $25 with a credit card, PayPal, or any other available method.
Q2: How are gift card codes generated?
Codes are auto-generated using a customizable pattern that you configure in the admin panel. You define the format by choosing alphanumeric, numeric-only, or alpha-only characters. You set the code length and can add a prefix like GIFT- to make codes recognizable. The system checks against all existing codes in your store to guarantee uniqueness every time a new card is generated. There is no manual intervention needed.
Q3: Do gift cards expire? Is that legal?
MageRa Gift Card gives you control over expiration through the Gift Card Lifetime (Days) setting. You can set expiration by number of days after purchase, or disable expiration entirely. Expiration laws vary significantly by jurisdiction. Many US states prohibit expiration on store gift cards or require that the expiration terms be clearly disclosed at the time of purchase. Other regions have different rules. You should check your local regulations before enabling any expiration policy to ensure compliance.
Internal Links
/blog/building-customer-loyalty-magento-2-reward-points(Reward Points — gift cards drive acquisition, reward points drive retention)/blog/one-step-checkout-magento-2-conversion-rates(One Step Checkout — reduces checkout friction during gift card redemption)/blog/complete-b2b-extension-package-magento-2(B2B Extensions Package — wholesale operations alongside gift card programs)
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