Business credit card ideas for employee and client holiday gifting

Small business owners can take advantage of credit card rewards to save on holiday gifts – if they follow certain guidelines


If you’re a small business owner looking for ways to save on client and employee gifts this holiday season, you can leverage credit card rewards. Here’s how to use them right.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs. Terms apply to the offers listed on this page.

The holiday season can mean a sales boost for your business as shoppers purchase gifts. It’s also time to do some gift-giving of your own for clients and employees.

You can also get a nice gift for yourself by using a business rewards card to earn points, miles or cash back on those purchases.

Keep these tips for small-business owners handy as you check off the items on your holiday shopping list.

See related: 8 expenses you should never charge on a business credit card

Gift cards offer simplicity

Choosing employee and client gifts can be tricky. The goal is to give something recipients will appreciate, but it can be difficult to nail down individual preferences.

Chris Willatt, owner of Denver-based cleaning company Alpine Maids, prefers gift cards for employee holiday gifting. The trick is knowing how – and where –to buy them.

“Find a card with a multiplier on your rewards on certain purchases,” says Willatt. His card of choice is the Ink Business Cash Credit Card, which offers 5 percent back on the first $25,000 in combined purchases at office supply stores and on internet, cable and phone services each year.

“Buying gift cards from an office supply store will earn you five times the rewards and you can gift the cards,” he says.

Leverage your card’s shopping portal

If gift cards seem too impersonal, consider browsing your card’s online mall for client and employee gift ideas.

“Definitely take advantage because you can double-dip by earning reward points on your card and get bonus points from using a shopping portal,” says Willatt.

Steven C. Hamilton II, founder of Hamilton Tax and Accounting in Grayslake, Illinois, recommends the AAdvantage shopping portal for earning bonus miles.

If you have a CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®, for example, you can earn up to 25,000 bonus miles when you shop the portal.

If you’re interested in earning more flexible rewards or cash back, other options include shopping through the Chase Ultimate Rewards shopping portal or Amex Offers.

Use accumulated rewards for holiday gifting

In addition to earning rewards, you can redeem ones you’ve already stockpiled for gift cards or merchandise through your card’s portal.

Promotional periods can help you stretch rewards further. Through Sept. 25, for example, American Express allowed shoppers to use 25 percent fewer points sitewide through Membership Rewards.

Similar promotions may be offered by your favorite shopping portal in time for holiday shopping. Just be sure to check the value first before redeeming for merchandise or other gifts.

“These are typically not the highest of award redemptions,” says Hamilton.

Here’s an example of how values compare. A $50 American Express gift card would require 10,000 Membership Rewards points, making them worth a half cent each. On the other hand, that same 10,000 points would be worth $100 toward a flight, giving you twice the value.

See related: What are American Express points worth?

Increase rewards through stacking

Stacking is a simple way to multiply rewards and/or savings on everything you buy for your business, including employee and client gifts.

  • Use coupon apps such as RetailMeNot to find promo codes and discounts when you shop online or in-stores.
  • Pair your rewards cards with cash back sites such as to earn additional cash back for online shopping.
  • Check for card-linked offers, which are specific savings deals or discounts that apply at checkout when you use your business rewards card to pay.
  • Sign up for business savings portals, such as Visa SavingsEdge and Mastercard Easy Savings, to earn discounts automatically when you shop partner merchants.

If you don’t have time to check individual apps or portals for deals, use a site like to view them all in one place.

Know what’s deductible and what’s not

“It’s important to know the IRS rules regarding gifts,” says Bonnie Lee, founder of Sonoma, California-based income tax firm Taxpertise. “You’re allowed a deduction of $25 per year, per recipient and that’s it.”

That’s important to keep in mind as you plan your gift budget. Lee says there are other tax rules to observe with holiday gifting.

  • Wrapping paper, ribbon, engraving, gift cards, insurance and mailing are excluded from the $25 cap.
  • Promotional items with your company name permanently imprinted aren’t considered gifts, but are deductible as an advertising expense.
  • Doubling gift deductions by including your spouse or business partner as a giver to the same recipient isn’t allowed. “You and your spouse or business partners are considered one giver,” says Lee.

Hamilton says deductibility can extend to certain fringe benefits you may offer employees, such as office snacks or certain holiday gifts that don’t exceed $100. “Flowers, fruit, books and occasional sporting event tickets are included in this benefit,” he says.

See related: Are reward points taxable or not?

For tax purposes, most gift cards are considered cash

One thing to keep in mind is that cash and cash equivalents, such as gift cards, cannot be excluded from your employees’ taxable income. As the business owner, you must report those gifts as part of your employees’ wages for the year, says Willatt.

That could leave them with a larger tax bill if holiday gifts are substantial, since gift cards are considered supplemental wages. They’d be subject to both income tax, as well as Social Security and Medicare tax, diminishing their value.

There’s an exception if a gift card is of minimal value and can only be redeemed for a specific item. In that case, it might qualify as a fringe benefit.

Finally, if you’re making gifts to clients and employees over the holidays, the most important tax rule to follow is to maintain good records.

Keep receipts and a detailed list of what you gifted and to whom to back up any deductions you’re claiming in case the IRS decides to take a closer look at your business tax return.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Business

5 steps to curb holiday pet debt

Pet-related expenses can add up during the holidays, whether you’re buying lots of gifts for your four-legged best friend or traveling with him. Here are five tips for cutting the cost of holiday pet care.

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more