Happy Midweek, !

This week we dive into the economics of Valentine’s day and its impact on gift cards volume demand.

February drives a surge in gift card sales, fueled by Valentine’s Day, making it a prime opportunity for retailers to capitalize on last-minute, flexible gifting.

E-commerce is rapidly expanding in beauty retail, projected to reach 24.5% by 2028, with digital gift cards offering a key opportunity to drive sales and customer loyalty.

California mandates that most gift cards cannot expire, with exceptions for loyalty rewards, refund credits, bulk corporate discounts (expiring within 30 days), and perishable food items.

— Consumer 150 Team

Gift Cards: The Secret MVP of Valentine’s Day

Valentine’s Day spending is at an all-time high, but here’s the real headline: February 14th is the biggest day of the year for last-minute gift cards, with sales surging 5.69x the daily average.

This isn’t just a fluke—it’s a pattern. Consumers love gift cards for their flexibility, but retailers love them even more for driving post-holiday revenue (many go unredeemed for weeks, keeping that spend locked in).

With 40% of Valentine’s shoppers already buying online, the smart move? Pre-Valentine’s flash deals on e-gift cards and follow-up promotions after the holiday. Love fades, but strategic gift card marketing keeps the romance (and revenue) alive.

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Ecommerce Hits the Beauty Sweet Spot

Key stat: By 2028, ecommerce will capture 24.5% of US beauty retail sales. With beauty categories like skincare and haircare growing over 11% annually, the momentum is clear despite economic pressures.

Tip for retailers: Digital gift cards are a powerful tool to capitalize on this growth. Beauty shoppers love flexibility, and gift cards make it easy to drive online and in-store traffic while ensuring customers stay loyal.

1Q Gift Card Rush – Cupid's Doing the Heavy Lifting

The data doesn't lie: the first quarter of the year is punching well above its weight when it comes to gift card issuance, now making up over 13% of annual totals. But why the surge, especially in February? Blame it on Cupid. Valentine's Day has transformed February into a gift-card goldmine, as people look for last-minute, flexible options to show their love.

Notably, January and March hold steady at a more modest share. January benefits from the post-holiday gift card exchanges and redemptions, while March gears up for spring festivities. However, neither can match February’s romantic boost.

This trend isn’t just about convenience—it’s behavioral economics in action. When faced with the "what do I buy?" dilemma, a gift card is the perfect no-fail solution. It’s fast, personalizable, and ideal for busy schedules. Retailers, take note: February is your time to shine with promotions and tailored offerings.

Pro Tip for Retailers: Maximize February's momentum by offering Valentine-themed gift cards and bundling deals—think "buy a gift card, get a bonus card." Promote these early and emphasize digital options for last-minute shoppers. This data-backed strategy can turn Cupid’s rush into a revenue win.

The Gift Card Startups Growth Hack

Startups love gift cards. Why? Because they’re a customer acquisition, brand awareness, and revenue-boosting machine—all in one little plastic (or digital) rectangle. But success isn't just about selling gift cards; it's about measuring their return on investment (ROI).

Take a startup coffee shop, for example. It rolls out a gift card program and notices that customers spend 20% more than the card’s value. That’s not just revenue—it’s incremental sales magic. Then there’s breakage (unredeemed balances), which can be a hidden profit center but also a reputational landmine if mismanaged. And let’s not forget the data goldmine: gift card transactions reveal customer spending habits, peak hours, and even upsell opportunities.

Bottom line? Smart startups aren’t just issuing gift cards—they’re engineering them for maximum ROI. Those that do it right aren’t just selling prepaid cash; they’re investing in long-term customer relationships.

California’s No-Expiry Gift Card Rule: What Retailers Need to Know

If your business is selling gift cards in California, here’s the golden rule: they can’t expire—with a few quirky exceptions.

Loyalty rewards? Expiry is fine. Refund credits? No problem. Bulk-discounted cards for corporate giveaways? Sure, but they need to expire within 30 days and have a loud-and-clear expiration date printed on the front. Oh, and if your gift card is for perishable food (like that seafood tasting menu no one actually redeems), it can expire too.

For everyone else? No expiry, period. If you’re running a gift card program, make sure it’s compliant—modern tools like Cardivo make this easy with one-click no-expiry settings. Because the last thing you need is a legal headache over a $25 gift card that’s been sitting in someone’s junk drawer since 2016.

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