Both gift cards and discount rewards are effective ways to reward customers and encourage repeat purchases, but they work differently within your store and program setup. This article explains how each reward type functions and when to use one over the other.
✅ Feature availability:
Gift card rewards are available on Starter, Growth, Plus, and Enterprise plans.
Gift card rewards are available on Shopify only
Gift card rewards
Gift cards are treated as a form of payment—similar to cash, debit, or credit cards. They offer flexibility for customers but come with a few important limitations to consider.
Key characteristics
Acts as payment: When a customer redeems a gift card reward, it functions as payment. The card balance can be applied to any eligible product in your store.
No usage conditions: You cannot set conditions for how a gift card reward is used. For example, you cannot require customers to spend a minimum amount before using their gift card.
Stackable: Customers can use multiple gift cards in a single purchase and can also combine gift cards with other discounts or promotions. This can help increase conversions during sales but may also make gift cards more susceptible to misuse.
Points earning behavior: Points for gift card transactions depend on your eCommerce platform:
In most cases, Smile awards points only once—either when a gift card is purchased or when it’s redeemed—to prevent double earning.
Important considerations
💡 Fraud prevention tip: To reduce the risk of gift card fraud, make sure customers can’t earn enough points for a gift card reward without spending money. For example, if a customer can earn 500 points without making a purchase, ensure that the lowest-value gift card reward costs more than 500 points.
ℹ️ Note for Shopify stores: Shopify does not provide data on when gift cards are used. As a result, Smile cannot track or update gift card rewards as Used or Available in your customers’ profiles.
Fixed amount discounts
Fixed amount discounts (for example, $5 off or $10 off) give customers a set amount off their order rather than acting as a payment method.
Key characteristics
Discount-only function: Discount rewards apply to an order total—they don’t create store credit or a reusable balance.
Combinability: By default, Smile-generated discount codes cannot be combined with other discount codes. You can change this in your reward settings if you want to allow stacking.
Customizable restrictions: You can control how discount codes are used by setting:
Minimum purchase requirements
Product or collection limits
When to use each reward type
Use case | Gift card reward | Fixed amount discount |
You want to let customers pay like cash | ✅ Yes | ❌ No |
You want to restrict use to certain products | ❌ No | ✅ Yes |
You want to prevent discount stacking | ⚠️ Limited control | ✅ Full control |
You want to offer reusable balances | ✅ Yes | ❌ No |
You want to track reward usage | ❌ Limited tracking | ✅ Fully tracked |