Each year, when the year -end holiday season is coming, “gift card” is becoming the hot keyword which is mentioned as a crucial marketing tool. The financial benefits that gift card programs provide impact businesses in the short and long term: through delivering increased revenues, increased margins, interest from un-redeemed balances, increased potential for future sales and a decrease in returned merchandise. Customized to your business, gift cards are a smart way to boost your sales and offer value, capitalize on some or all of the financial rewards.
Advantages of Gift card
- Build brand awareness and loyalty: Gift cards are advertising billboards in the consumer’s wallet. They can be reloaded with value, thereby encouraging repeat business.
- Increase sales: A national survey reported 56% of consumers to spend an average of $20 more than the initial face value of the gift card.
- Cost-effective: Low costs to start the program only include gift card printing and a small transaction fee. Variable costs are driven by performance of the program.
- Enhance cash flow: Gift cards are prepaid before you provide goods and services. You can invest these prepaid dollars in your business.
- Flexible program: A Gift Card with Purchase program can be used to promote certain products, seasonal events, etc. It can be implemented quickly and easily.
How to use Gift Card
1. Gift Card with Purchase Program
Offering a gift card with purchase is a great way to encourage customers to spend more. Give customers a Gift Card when they purchase “X” amount and make it redeemable towards another purchase of “Y” amount. This will increase your average ticket and drive repeat purchases. Ask us how to implement this program.
2. Business Card with Bang
Load 100 Gift Cards with $10 (store credit) and give them to everyone you meet. Tell them what you do and invite them to come visit your place of business and the first “X’ dollars is on you. You want to impress people – this will do the trick and you’ll acquire new customers as a result.
3. Electronic Coupon
Send Gift Cards in the mail with a promotional value loaded and you’ll drive traffic to your doorstep. People respond far better to plastic than they do to paper because they equate plastic Gift Cards with money. When you include a Gift Card in a direct mail piece, response rates increase by over 75%. A promise of “15% off” is intangible to the customer, but receiving a gift card at the time of purchase or through the mail after the purchase has a more powerful effect. It also dramatically increases return visits.
Tips for creating a successful Gift card Purchase program
- You must have an electronic gift card program. If you don’t already have one, IBF can provide the tools and expertise you need to set up a successful program.
- Merchant should design new gift cards to reflect the “Gift Card with Purchase” promotion.
- Put an expiration date on the cards, usually 30 days after the program ends, to encourage a quick return visit. (Merchants don’t have to worry about adhering to state enchantment laws as GWP cards are promotional cards.)
- Set the minimum purchase required to receive the gift card higher than your average ticket. For example, if the average store ticket is $75, then set the spending level at $100.
Partner with schools or charitable organizations in your community to give away pre-loaded Gift Cards with a promotional value to students who make straight A’s or to be auctioned off at fundraisers. Partner with other businesses and give out each other’s Gift Cards to cross-sell complementary products.
5. Prepaid Cards
Offer your customers the opportunity to pre-load Gift Cards with dollars to use in your store and give them more than they spend (buy $25 and get $30). You’ll save interchange on credit card transactions and you’ll have a great opportunity to sell re-loads in the future, ensuring a steady stream of recurring cash flow. An option to mail gift cards( discussed: Is it safe to send them via mail?).
6. Merchandise Credit Cards
Never give cash back again. When customers return merchandise, load Gift Cards for the credit amounts to ensure that customers spend the money at your store.
The significant financial benefits motivate many of the nation’s most successful merchants to invest heavily in their gift card programs.