The default holiday playbook is simple: discount deeper than last year. The problem is that it is also the fastest way to erode margin, and it trains customers to buy only when something is on sale. In a season where every competitor is racing to the bottom on price, a bigger markdown rarely makes you stand out. It just makes you less profitable.
The good news is that price is not the only lever. Some of the most effective holiday tactics create value for the shopper without cutting into every price. Here are eight worth considering this season.
1. Gift with purchase
A free gift with a qualifying purchase adds value without lowering the price of the product itself, which protects your margin while still giving shoppers a reason to buy now. It also tends to pay off past the holidays: shoppers who receive a gift are 64% more likely to make another purchase within three months. Dyson has used this well, offering a detachable attachment available only with the purchase of a full set, which raised the perceived value of the bundle instead of discounting it.
2. Bundles and curated gift sets
Combining complementary products into a ready-made gift set gives shoppers a fast, stress-free option and encourages a larger purchase, without a steep discount. The impact on order value is real: McKinsey research finds bundling drives around a 20% sales increase and up to 30% profit gains, and most brands see average order value climb 20 to 30% with well-designed bundles. The key is that the value comes from convenience and curation, not a slashed price. For more on this, see our guide to 10 proven ways to increase average order value.
3. Early access and perks for loyal customers
Returning customers convert at a higher rate and often drive a large share of holiday revenue, yet loyalty tends to be an afterthought at peak season. Giving your best customers early access to holiday inventory, a private shopping window, or a members-only perk rewards them without a broad discount. It signals appreciation, deepens the relationship, and concentrates the value on the customers most likely to come back.
4. Targeted cash back instead of storewide markdowns
A blanket sale discounts for everyone, including the customers who would have bought anyway. A targeted cash back offer, by contrast, delivers value to the specific shoppers you want to move, new customers you want to acquire or lapsing ones you want to win back, without lowering the price for the whole store. Because card-linked offers run on transaction data and reward a verified purchase, you can aim the incentive where it changes behavior and protect margin everywhere else. It is a way to compete on value without competing on markdown depth.
5. Flexible payment options
For big-ticket or gift purchases, how a customer can pay matters as much as the price. Offering flexible payment options like buy now, pay later can remove the hesitation on a larger holiday purchase without lowering the price at all. The effect on sales is well documented: RBC Capital Markets estimates BNPL increases retail conversion rates 20 to 30% and lifts average ticket size 30 to 50%. For younger, value-conscious shoppers especially, making a purchase feel manageable can be the difference between a sale and an abandoned cart.
6. Make it an experience or a game
Shoppers are flooded with offers that all look alike, so turning a promotion into something interactive helps it stand out. A "12 days of" daily reveal, an advent-style calendar of small rewards, or a gamified loyalty campaign gives customers a reason to come back day after day. Starbucks has built holiday campaigns around gamified, repeat-visit mechanics that drive engagement throughout the season. The value here is attention and habit, not a discount.
7. Plan the after-holiday relationship
The most overlooked holiday tactic is not a holiday tactic at all. It is what happens next. A season that acquires a flood of customers is only worth it if some of them come back, and most deal-driven holiday shoppers do not without a reason. A well-timed offer in December or January, aimed at a first-time holiday buyer's second purchase, turns a one-off sale into a lasting customer. We cover this in depth in how retail brands turn Black Friday shoppers into repeat customers.
8. Free gift wrapping
Free gift wrapping is a small operational cost that delivers outsized value to time-strapped holiday shoppers. Nordstrom and Williams-Sonoma have long used it to stand out in competitive markets. It creates a positive first impression, adds a service customers genuinely want during the holidays, and does it without touching your prices.
The takeaway
Discounting has its place, but it should not be the only tool in your holiday kit. Gift with purchase, bundles, loyalty perks, targeted rewards, flexible payments, experiences, a plan for the second purchase, and gift wrapping all drive holiday sales while protecting the margin that a race to the bottom gives away.
The brands that win the season are rarely the ones with the deepest discount. They are the ones that give shoppers real value in ways competitors are not copying. For more on making the most of the season as a whole, see making the most of the biggest retail months.
