A gift card is one of the few marketing tools that pays you before it costs you anything. A customer hands over $25 today, the recipient walks in next week, and a chunk of those balances is spent above face value — or never spent at all. If your café runs on Square, you can sell digital gift cards (eGift cards) for free, deliver them by email or text, and have them redeemable at your counter, online, or in a branded app.
This guide covers what Square eGift cards actually cost, how to set them up, and — the part most “just turn it on” articles skip — how to use them as a deliberate engine for prepaid cash and repeat visits rather than a button nobody clicks. It’s written for an independent café or restaurant owner on Square in Canada or the US.
Why gift cards work for a café specifically
Gift cards are unusually well-suited to coffee and quick-service for three reasons, and it’s worth being precise about each because they’re often blurred together.
1. You get the cash before you do the work. A sold gift card is prepaid revenue. The money is in your account today; the espresso comes out of the machine later. For a small business, that float is real.
2. They bring in people who weren’t your customers. A regular buys a card for a friend or a coworker. That recipient might never have walked in on their own. The gift is a referral with a balance attached.
3. A portion is never redeemed — and that’s margin. The industry term is breakage: gift card value that’s bought but never spent. Estimates vary, but a meaningful slice of balances goes unused — figures in the 6%–19% range get cited, and large chains report tens of millions in annual breakage (Starbucks has reported figures around $100M+ in a single year). At café scale it’s modest in dollars, but it’s pure margin on cards you already sold.
On top of that, multiple consumer studies find that gift card recipients commonly spend more than the card’s face value when they redeem — the card sets a floor, not a ceiling. Treat the specific percentages you’ll read online (figures from ~61% to ~75% of recipients overspending get quoted) as directional industry data, not a guarantee for your shop. The mechanism, though, is consistent: a $25 card brings someone in who then spends $32.
A gift card is a referral, a loan, and an upsell in one — and the float lands in your account before you pour a single cup.
What Square eGift cards actually cost
Here’s the honest fee breakdown, because “free to set up” doesn’t mean “free forever.”
| Item | Cost | When it applies |
|---|---|---|
| Setup | Free | Enabling eGift cards on Square Online |
| Load fee | 2.5% of the amount loaded | Each time a card is purchased or reloaded (waived on Square Premium plan) |
| Online sale processing | 3.3% + 30¢ (card-not-present) | When a customer buys an eGift card on your order page |
| In-app / in-person sale | Standard Square card rate | When sold through the Square app or at the counter |
| Redemption | Free | When a customer spends a card |
| Physical plastic cards | Per-card cost to order packs | Only if you also want physical cards |
Source: Square’s gift card pricing and fee pages, 2026. Confirm current rates for your country and plan.
So on a $25 eGift card bought online, you’d pay roughly the 2.5% load fee plus 3.3% + 30¢ processing — on the order of $1.75–$1.95 total — to collect $25 of prepaid, often-overspent revenue. That’s a favorable trade, and it’s a one-time cost per card, not a recurring cut like a delivery marketplace’s 15–30% commission on every single order.
How to set up Square eGift cards
A realistic do-it-this-week sequence. None of it requires a developer.
- Enable eGift cards in your Square Dashboard. Open the Gift Cards section and turn on eGift cards. Square gives you a hosted eGift card order page automatically.
- Pick your design and preset amounts. Choose a card image (your logo or a seasonal photo) and set a few suggested amounts — $10, $25, $50 works for most cafés — while still allowing a custom value.
- Set redemption rules. Confirm cards redeem at your locations, online, and — if you have one — in your app. Check whether your jurisdiction restricts expiry; in Canada most gift cards legally can’t expire, so don’t set one.
- Get the link everywhere. Put the “Buy a gift card” link on your Google Business Profile, Instagram bio, website header, and a counter QR code. A gift card page nobody can find sells nothing.
- Test a real purchase. Buy a small card yourself, confirm the recipient email/text arrives, and redeem it at the register so staff see exactly how it works.
- Train staff on redemption. Make sure every person on the counter can take a code or scan a card without hunting for a manager. Friction at redemption sours the gift.
eGift vs. physical gift cards: which to start with
You don’t have to pick one forever, but you should start with one.
Start with eGift cards if you want zero upfront cost and instant delivery. There’s no inventory to order, nothing to stock, and a customer can buy one for a friend’s birthday at 11pm from their couch. For most independent cafés, this is the right first move.
Add physical cards later if you have a counter-display impulse-buy opportunity (holiday season especially) or corporate buyers who want something tangible to hand over. Physical cards carry a real per-card cost since you order them in packs, so add them once you know gift cards sell, not before.
The digital-first logic mirrors the broader theme across this blog: start with the lowest-cost, lowest-friction version, prove demand, then invest. It’s the same reasoning behind standing up mobile order-ahead on Square before committing to anything heavier.
Turning gift cards into actual repeat visits
Selling the card is half the job. Getting it redeemed — and turning that redeemer into a regular — is where the value compounds. A few deliberate moves:
- Promote them at the right moments. November–December is the obvious window, but “treat a coworker” and “thank a teacher” prompts work year-round. Put the gift card link in your receipt footer and order-confirmation emails.
- Pair gift cards with loyalty. When a gifted customer redeems, that’s the moment to enroll them in your loyalty program so they come back on their own dime. The two tools are built to work together — see how Square loyalty turns first-timers into regulars.
- Reload, don’t just redeem. Encourage customers to top up an existing card (especially in an app, where the balance is one tap away) instead of treating it as a one-time gift. A reloadable card is a stored-value habit.
- Watch breakage honestly. Unredeemed balances are margin, but a customer who forgot they had a card is a customer you failed to bring back. The goal is redemption plus overspend, not a drawer of forgotten cards.
Where a branded app changes the math
On a plain web store, an eGift card is a link someone has to find and a balance they have to remember. Inside a branded app, the card lives on the home screen next to ordering and loyalty: the customer sees their balance every time they open it, reloads in one tap, and gets a push when it’s running low or when there’s a gift-card promotion.
That’s how Tany packages it for Square cafés — branded iOS and Android ordering plus web, with eGift cards, self-running loyalty, and push all in one app on your existing Square POS, live in about a day for $99 CAD/month per location. The gift card itself is the same Square mechanism; putting it in a channel the customer opens daily is what turns a one-time gift into a stored-value habit.
You don’t need an app to start, though. Turn on Square eGift cards this week — it’s free, it collects cash upfront, and it’s one of the rare tools that pays you before it costs you anything.