Quick question before we dive in:
If you gave 15,700 customers a $30 gift code, how many do you think would actually use it?
Most founders guess somewhere between 60-80%.
The real number? Closer to 5%.
And before you think that's a problem, let me explain why it's actually the entire reason this tactic works.
Yesterday I told you about the supplement brand that replaced their year-end discount with bounce-back gift codes.
Here's the part I didn't tell you:
They issued $470,000 in total credits across their December buyers.
Their actual cost? About $24,000.
That's it.
Because here's what actually happened to those credits:
~4% redeemed in the first 60 days (these were your high-intent repeat customers who were coming back anyway)
~1% redeemed later (between months 3-6, often triggered by a win-back email)
~95% never redeemed at all
Now, most founders hear that last stat and panic.
"We gave them something and they didn't even use it? That's terrible!"
No. That's the feature.
Here's why low redemption is actually perfect:
1. The perceived value is high
Every customer who got that credit felt good about it. It increased satisfaction. It made the brand feel generous. Even if they never came back.
2. The realized cost is low
You're not paying for goodwill you can't afford. You're creating optional downside with guaranteed upside.
3. Only high-intent customers redeem
The people who actually use the credit are the exact people you want back. They're not bargain hunters. They're repeat buyers.
This is one of the only retention tactics where customer happiness ≠ proportional cost.
That asymmetry is the hidden value.
Compare that to a traditional discount:
Let's say the supplement brand ran a 20% off sale instead.
100% of customers get the discount (whether they're repeat buyers or one-time deal seekers)
Your margin takes an immediate hit across every single order
You train customers to wait for sales (hello, January revenue drop)
With the gift card approach:
100% of customers feel valued
~5% actually cost you anything
You create a return loop instead of a transaction loop
See the difference?
The psychology is even better than the math
Here's what I've observed across dozens of brands using this:
Customers like having credit more than they like using it.
It's weird, but it's true.
The gift code sits in their inbox. They know it's there. It makes them feel connected to your brand.
Some forget about it entirely. Some remember months later and come back. Some never use it but tell their friends about how "generous" your brand is.
You're not giving money away. You're buying long-term brand presence in their mind.
And you're doing it for pennies on the dollar.
Tomorrow: How to actually implement this (the right way)
Because here's the thing … this tactic only works if you set it up correctly.
The timing matters. The framing matters. The redemption requirements really matter.
I'm going to give you the exact framework, including how to use AI to automate most of the setup and messaging.
For now, hit reply and tell me: Does this change how you think about retention tactics? What's your biggest question about the mechanics?
See you tomorrow,
Jeremiah
P.S. One founder asked me yesterday: "What if this cannibalizes full-price purchases?" Great question. The data says it doesn't … I'll explain why in the next email.
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There was no review queue, no editorial process, no post-facto revisions. I just wrote it and sent it … therefore, I can pretty much guarantee some sort of typo or grammatical error that would make all my past english teachers cringe.
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