What are Gift Cards?
Gift Cards are sometimes referred to as “stored value cards.” They are purchased from your business usually in amounts requested by the customer, then, just like a credit or debit card, the Gift Card is used to make purchases at your establishment. Gift Cards can be thought of as automated gift-certificates.
Expand your customer base and generate new sales by offering existing customers the opportunity to purchase Gift Cards for their friends, family members and business contacts.
The Business Case for Gift Cards
The ideal scenario for people receiving a Gift Card from your business is that they visit your establishment, spend more than the stored-value of their Gift Card and become regular and loyal customers. Of course, we don’t live in an ideal world and this is where the other business benefit of your Gift Card program shines.
In the 80’s a very large credit card company promoted purchasing their gift certificates for travel. They also suggested that those travelers hold on to their last gift certificate as a souvenier of their travels. The value of those gift certificates that were never cashed amounted to many millions of dollars. This brilliant marketing campaign resulted in a windfall for the company; essentially this was free money available for immediate use by the company.
While not quite as lucrative as the above example, Gift Cards, nonetheless, represent a similar opportunity for your organization. Some of those who receive Gift Cards simply lose them or don’t use them. Others don’t use the entire value of the card. While it is preferable to build long term relationships from Gift Card recipients there are few businesses that would argue that free money is second-best.
Gift Card Facts:
- Only 54% spend the whole value within one month
- Only 61% spend the whole value on the first purchase
- Over 55% spend more than the whole value of the card
- $17 billion was spent on Gift Cards in 2009
- Gift Card sales are responsible for 11 percent of holiday spending
- Clever retailers link their Gift Cards with specific product promotions
- Re-loadable value capability
- 24/7 Client Service
- Option of flexible values amount or pre-denominated values
- Maximum value limit controls
- Maximum number of daily uses controls
- Gift Card reporting