How to Issue Etsy Gift Certificates
Etsy recognizes the importance of marketing your shop and offers several built-in promotional tools. In addition to offering coupons, you can sell gift certificates to your Etsy shop. A gift certificate must be a tangible item — say, a paper certificate or a postcard that's mailed to the recipient, or even a digital PDF file, which can be e-mailed. (If you go the digital route, be sure to select a file type that the recipient can't alter.)
In addition to touting your shop's name and Etsy address, the gift certificate must include a unique, secret code (this can be anything you want) with instructions for the person redeeming the gift certificate to both choose the Other payment method when checking out and enter that code in the Message to Seller section.
You may need to enable the Other payment method; to do so, click the Your Account link that appears along the top of every Etsy page, click the Shipping & Payment link under Shop Settings, click the Payment Methods tab, click the Other check box under Payment Methods You Accept to select it, and then click the Save button.
To sell a gift certificate, you create an item listing for the gift certificate, just as you would for any other item in your shop. This item listing must contain the phrase "gift certificate" both in the title and description and as a tag, and must include all the same information as the gift certificate itself (minus the unique, secret code). The listing also needs to clearly state that the gift certificate is valid only in your Etsy shop. Be aware that Etsy will assess a fee both when you sell a gift certificate and when your buyer uses the gift certificate to purchase another item in your shop.
When it comes to issuing gift certificates, you'll want to be crazy organized: Keep track of the unique code applied to each gift certificate, the amount each gift certificate is for, and when each gift certificate is redeemed. Note that if a customer applies a gift certificate to an item that costs more than the gift certificate's value, you need to send that person a revised PayPal invoice for the difference.