This paper shows that a gift-giving strategy can be a profitable alternative that weakens price competition. We investigate the impact of differentiating a gift-giving strategy on the retail oil prices, profits, consumer’s surplus, and social welfare. We derive three results: (1) the gift value does not affect the retail oil price competition, (2) the giftgiving strategy mitigates the retail oil price competition and reduces consumer's surplus, and yet it increases social welfare because firms gain more than consumer's lose, and (3) there is no incentive for firms to explicitly coordinate and declare a joint industry-wide gift-giving strategy. In other words, firms’ profit is independent of the methods used by firms to execute the gift-giving strategy.