I’m sure you have received and/or given at least one or two gift cards this year so if you don’t already have an active gift card program at your business, it may be time to reconsider.
There are tons of hidden benefits buried under the possibility of selling gift cards at your business – some more obvious than others.
Studies held by the National Retail Association show that at least 3 out of 5 adults expect to receive a gift card from someone this year.
Last year 48% of adults received a gift card during the holiday season according to a recent Time Magazine poll.
That’s a lot of gift cards being sold and if you don’t offer them at your business you are probably missing out on new customers and increased revenues.
You can obtain an entry level gift card program –with your company logo on the card – for $30 to $50 per month. It’s well worth the money to work it into your marketing budget.
There’s a reason that the retail and internet giants like Amazon, Target and Macy’s use them so here are 10 solid reasons that you should too.
#1 – High ROI
The financial benefits outweigh the cost of the program. Setup costs for basic programs start out at around $50 to set up and the monthly cost to maintain the program is usually between $30 to $50 as I mentioned above.
The amount of increased revenue and ancillary benefits that come with selling gift cards at your business will far outweigh the cost to implement and maintain the program.
You’ll save money in processing fees, realize profits from unredeemed cards and get new customers all from having a gift card program.
#2 – Increase customer loyalty
Gift cards are another product that you can offer to your customers. By giving them more options to choose from, your increasing their ability to buy from you.
Happy customers like buying this from you. When they’re happy they tell their friends and come back to buy from you more often.
#3 – Increase customer spending
Over 60% of gift card holders spend more than the value of the card and nearly 75% of those who do will overspend by 20% of the value of the card.
That’s to say that someone who brings a $100 gift card to your business will spend $120.
The reason for this is that consumers don’t want to feel like they are leaving free money behind so they spend beyond the value of the card in order to use all of the “free” money they have been given.
#4- Creative marketing possibilities
This one is my favorite. Implementing a gift card program at your business is like finding the key that unlocks the next level of your favorite video game. A whole new world emerges.
You can offer gift cards as giveaways, prizes, or thank you gifts to your friends, family and customers.
You can run promotions with them and even tie gift card usage into a loyalty program to increase repeat business.
#5 – Get NEW customers
Most of the time gift cards are given as gifts. This inherently means that someone who has not previously been exposed to your business is given an opportunity to come in and become a new customer of yours.
For the new customer it’s a “free” chance to try out your product or service. This is a great way to increase exposure to your business and gain new regular and loyal customers.
#6 – Increase cash flow today
When you sell a gift card, you receive the money instantly for the privilege of future products/services sold.
Get paid today, increase cash flow and know that 10% of all cards sold will go unredeemed.
#7 – Create free money
Roughly 10% of all gift cards that are issued go unused or unredeemed. That means that for every $1,000 dollars spent, you’ll retain $100 from those who either lost their card or forgot that they had it and never bothered to bring it in and redeem it.
Think about it, how many gift cards have YOU lost in your lifetime? I know I’ve lost a handful and the business that owned that gift card came out ahead.
#8 – Incentivize customers to come to YOUR business
Unlike prepaid Visa or Mastercard, gift cards can only be redeemed at your location(s) so you inherently create a reason for someone to come to your store and spend more.
And if they don’t redeem the card, see number #7.
#9 – Reusable marketing benefits
Wouldn’t it be nice if all marketing efforts were reusable? Well some are, and gift cards are one of them.
Most gift card programs come with cards that can be reloaded after they are used. This means that you can buy the gift card package once—to resell to your customers—and use them as many times as you can.
If an issued card gets lost you can simply order more and with the 10% non-redemption rate we talked about earlier you will still come out ahead.
#10 – Lowered transaction fee and per item costs
On average 1 out of every 2 people will need to visit your store twice in order to redeem the full value of the gift card. That means you’re going to accept payment twice but since it’s a gift card you don’t pay a discount rate like you would if it was a credit card transaction.
This little trick saves the giant retailers billions of dollars in processing and transaction fees.
Gift card sales are increasing
If you’re still on the fence about whether to implement a gift card program think of it this way: if someone told you that you could enter a contest for a $10,000 and all you had to do was write your name on a piece of paper and drop it in a hat to enter, would you do it?
Of course you would. You’d be silly not to. It’s a chance at free money!
You’ve just been introduced to 10 ethical ways you can increase revenue to your business by getting some free money from your customers through the use of gift cards. Now all you have to do is take action and set the program up.
Remember gift card sales are rising so now is your time to get in on the action and implement a gift card program.