Gift cards have supplanted cash as a popular option for shoppers who just don’t know what to get for a loved one on a special occasion. In 2016, American holiday shoppers bought an average of three gift cards each, with an average value of $46. Gift card spending during that year’s holiday season topped $27 billion, but people buy gift cards year-round – for birthdays, mother’s and father’s days, Valentine’s Day and other special occasions.
If you’ve recently visited a chain department store, supermarket or drug store, you’ve probably seen the racks of gift cards available from major retailers of all kinds. But it’s not just big corporations who can get in on the gift card game. If you’re a small business owner, selling gift cards to your customers could be easier than you think – and it’s a great way to drum up new business, boost sales and compete with the big national chains.
The Business ROI of Gift Cards
There’s a reason so many national retailers offer gift cards – they’re significantly profitable for the companies selling them. People buy so many gift cards; even in 2008 and 2009, when times were hard across the board, American consumers snapped up gift cards at an average rate of six cards per person, spending $52 dollars per card on average. Seventy percent of consumers purchased a gift card in 2008, and 79 percent bought one in 2009.
People buy gift cards for restaurants and department stores, coffee shops and movie theaters; they buy gift cards for online retailers and for gas stations and grocery stores. People who receive gift cards will make special trips just to spend them, and 69 percent of gift card recipients end up spending more than they were gifted. That means that when you sell a gift card, you may be getting a new customer, one who will most likely spend more in your business than the amount loaded onto his or her gift card.
Gift cards allow you to compete with national chains because they’re a way to offer your customers that same level of convenience. You can build customer loyalty and promote your business by offering a promotional free gift with the purchase of a gift card – and that gift could be an additional gift card of a lesser value! If a customer buys a $50 gift card and you give him or her a free $5 gift card, that will give him or her a reason to return to your business and overspend the value of that $5 card. You’ll boost sales both by encouraging your original customer to return and by enticing a new customer through the front doors.
It’s Easy to Start and Operate a Gift Card Program
These days, many check processing and merchant services companies sell gift card packages that are affordable and easy to implement. The upfront cost of ordering gift cards customized with your branded logo and business name can be negligible. Many merchant services providers sell off-the-shelf gift card packages; starting your gift card program could be as easy as getting a box in the mail.
Of course, many gift card packages come with a range of features that can benefit both your business and your customers. Think about what you want out of a gift card program. Obviously, you’ll want the extra advertising that branded gift cards can provide. Look for a merchant gift card program that can track transactions across multiple locations, is easily integrated with a point-of-sale (POS) terminal and offers marketing support to help you sell the gift cards to customers. Digital reporting tools are also valuable; they can help you send out reminders to gift card holders, offer rewards and incentives and provide a portal where customers can track their gift card balance and redeem, reload or repurchase gift cards.
If you’re still using hand-written gift certificates, you need to get with the times. Gift cards are more secure, and customers want them for the flexibility and ease they offer. With plenty of merchant services providers offering gift card packages, it’s easy and cheap for small business owners to offer gift cards to their customers. Don’t let major chain retailers have all the fun; start your gift card program today!