During the holiday season, gift cards are all the rage. They make quick gifts for when shopping time is limited and are the perfect choice for that notoriously hard to shop for someone. If your business is not already offering gift cards, you should probably at least consider them. Here are the top four reasons why.
1. Make Revenue First, Sell Products Later
Gift cards are great for improving your business’s cash flow because purchasers pay well before you ever have to part with any merchandise. Gift card sales will add to your holiday revenue totals but also ensure you’ve got plenty of inventory available in January when the recipients come in to redeem the cards. Plus, when you factor in the gift cards that will never be redeemed, your bottom line starts to look pretty well-padded!
2. Gift Card Users Spend More
The human mind is a strange thing. A customer with a $25 gift card and a $20 item will hunt around the store for another small item they can buy that will use up the rest of their balance. Chances are, that item will be slightly more than their remaining balance, and you’ll earn extra revenue from a customer who otherwise might not have come into your store at all. Gift card incentive programs are also great ideas to reward loyal customers. They work better than coupons because they feel like free money – your customers will spend more than they might have otherwise because of the boost from the card. Finally, depending on the amount of money on the card and the prices of items at your business, customers may make multiple trips before they’ve fully depleted their card. Hello, free marketing opportunity!
3. Convenient for You and Your Customers
Most people are accustomed to carrying around a few plastic credit cards in their wallets, so a gift card will fit right in. Paper gift certificates, on the other hand, have to be folded and tucked away where they will most likely be forgotten. Plus, cashing in and keeping track of a whole bunch of paper certificates can be complicated for your cashiers and bookkeepers. Plastic cards are swiped at your normal terminal and processed much like regular credit cards (contact your processor for specifics) – a much simpler process. Finally, gift cads are more durable than paper certificates and offer a longer time horizon for redemption because they’ll survive an accidental trip or two through the washing machine.
4. Branding and Marketing Opportunities
Many gift card programs will allow you to personalize your cards with your logo or other promotional messaging, ensuring your name will be carried far and wide. They are fairly inexpensive for the amount of visibility they earn for your business, even if your customers never take them out of their wallets till they’re in the store. Every time they crack the wallet open they’ll see the card and be reminded they have an on-the-house shopping spree ready and waiting.
Get Started with Gift Cards Today
Talk to your credit card processor about the specifics of offering and accepting gift cards at your business. If yours isn’t getting you the answers you need, we’d be happy to show you the ropes. Give us a call a 1-855-360-0360 or drop us a line on our website. We’re looking forward to hearing from you!
PS – Just starting out in the retail industry? We’ve got some tips to help you succeed.
PPS – Brand new entrepreneur in another industry? We’ve got tips for you too.