We’re all used to paying with cards these days. Whether it’s a debit card or credit card, most of us are very comfortable with completing the sale of goods and services with little plastic rectangles that fill our wallets or purses. They’re not the only options though.
Benefits Of Investing In A Gift Card Scheme
Ever since the first gift voucher, a humble book token no less, was issued in 1932, the gift card has gone on to revolutionise the high street shopping experience and, in recent years, the online shopping space too.
Customer Incentive
For retailers, gift cards are good business. They’re an incredibly convenient way for customers to buy goods and offer them a tangible incentive to spend that, and often more, money with you. Treat them well and they become repeat customers. This particular small piece of plastic offers some real financial benefits to any business, so let’s take a look at some of them.
Repeat Business
Research has shown that 55% of customers who receive a gift card, visit that store more than once to spend the money it holds. Obviously, if the card is exclusive to your business, then they have no choice, but the real benefit is the repeat visits which often involve buying additional items and therefore spending more than the initial balance. In fact, around 70% of consumers spend MORE than the value of the gift card they receive.
Whether you’re offering a standard gift card or a more customised, personal card, these gift cards give you the opportunity to increase customer engagement. This goes beyond the traditional transaction, but it offers you the chance to sell to them with additional options through more targeted marketing.
Capitalise On Celebrations Or Events
These days, the retail calendar has more than just the Christmas period to capitalise on sales. We now have Black Friday, Mother’s Day, Father’s Day, Cyber Monday and any number of other days to push sales and promotions. This is where gift cards really come into their own. It is also a good idea to look at investing into gift card printing, to be able to produce custom designed gift cards for different events/celebrations, as this can help to increase your overall market.
When buying presents, customers see gift cards as both a convenient and acceptable present to give friends and family. The more sales-driving celebrations there are, the more chances you have to sell gift cards. In addition, gift cards can sell more than just products, you can now use them to sell everything from weekend getaways, experiences, subscriptions and pamper days. This means that no matter what business you’re in, you need to become a recognised gift card retailer to capitalise on these benefits.
Increased Cash Flow
When customers buy a gift card, either for themselves or others, the money they spend helps to increase your cash flow. At the point of transaction, your business gets money without the loss of inventory. We’ve talked earlier about how customers often spend more than the balance, but there’s a chance that the money instantly added to your cash flow will never be cashed in. In the UK alone, anywhere between £250m and £300m is spent on gift cards that go unused. That’s about 6 - 7.5% of the total annual gift card sales. This can be due to loss, cards that pass their expiration date or are just forgotten about. There’s also around 6% of the value of the card that is never used, for example spending £18.99 of a £20 gift, with the ‘change’ being refunded to the card, then disregarded.
If selling gift cards is something you’re wanting to explore as a business, then remember to place them in highly visible areas of your store. Near cash, registers are always a good place to start. Not only will they be easily seen by all, but offer the chance for impulse purchases.
Plastic Gift Card Conclusion
Thank you for taking the time to read this post. We hope you have been able to discover some of the key benefits which can be taken from gift cards.
