- Grow Your Business With Gift Cards Balance
- Grow Your Business With Gift Cards For Cash
- Grow Your Business With Gift Cards Expire
- Grow Your Business With Gift Cards Delivered
The easiest place to start looking for a small business gift card solution is with your existing credit card processor or merchant bank. Though gift cards aren’t their primary business, most will have a closed-loop card (one that can only be used at your store) available. While offering gift cards isn't a new idea for retailers, it’s an increasingly important tool to use to grow your retail business. Gift cards are widely given and appreciated; 74% of consumers say they like receiving gift cards as a holiday gift, according to a 2017 holiday shopping survey by Socratic Technologies and Vantiv. Gift cards are more than a great gift idea. They’re powerful business tools that can help your company grow. Download your copy of 50 Gift Ideas You'll Flip Over, a fun and valuable ebook packed with 50 gift card usage ideas. This gift card resource can help you: Increase new customer acquisition; Increase gift card sales.
You’re only as strong as your last sale. That’s why attracting and retaining customers is the top priority for any small business.
Implementing a gift card program does just that by killing two birds with one stone—it increases sales and drives customer loyalty.
Does your small business offer customer gift cards? If not, then it should.
A 2017 holiday shopping survey by the National Retail Federation of almost 7,000 consumers found that gift cards topped consumer wish lists at 61 percent, while 59 percent were planning to give gift cards.
“Gift cards continue to be the preferred gift to give because of the convenience to give a gift card as a gift and not have to overthink it,” says Ana Serafin Smith, senior director of media relations at the National Retail Federation.
As gift cards continue to grow in popularity, the biggest beneficiary might very well be small business owners. This is because the value of the card translates into not just guaranteed sales for the business, but also increased sales.
Grow Your Business With Gift Cards Balance
When you consider the number of gift cards you can potentially sell and multiply that by $28, that’s a lot of money to be made.
If you don’t already have a gift card program, you could very well be missing out on an easy avenue to attract customers and boost sales per transaction.
In a competitive landscape, small retailers need to produce, market and promote gift cards in order to attain up to 20 percent more sales, beyond the value of a gift card.
Here are the ways you can better market your gift cards:
Create a Campaign to Tell Customers All About Your Cards
Offer Buy-One-Get-One-Free Promotions
Sell Specialized Gift Cards for Special Occasions
Takeaways and Next Steps
Create a Campaign to Tell Customers All About Your Cards
In order for your customers to know about your gift cards, you’ve got to make your card visible and spread the word across all marketing channels. Macy’s, for example, does a great job at displaying its gift cards left, right and center in stores, gift card kiosks, on its website and its app.
On its stand-alone gift card page, Macy’s provides different ways for customers to purchase and package gift cards (Source)
HOW TO PROMOTE IN STORE: Make it easy for customers to find your gift cards in store. It could be something as simple as putting up signs that say “Ask about our gift card promo” or “Give the perfect gift card,” either at your checkout counter or around high-traffic areas of your store.
HOW TO PROMOTE ONLINE: As busy customers increasingly look for ways to send instant gifts electronically, offering e-gift cards has become a prerequisite for any retailer that wants a slice of that growing pie.
With e-gift cards, customers don’t even have to come into your store to buy your card; they can simply go to your website and make a purchase. Your job is to make it easy for them.
Like Ginger Bay salon, you can feature a “gift cards” tab on the navigation bar or homepage of your website so shoppers know where to go to make a quick and easy purchase. The Missouri-based salon leaves no stone unturned by offering its customers different purchasing options (e.g., gift certificates that can be printed/sent via email or traditional gift cards).
Ginger Bay prominently features gift cards on its navigational bar and homepage (Source)
Here are other ways to further drive e-gift card sales on your site:
- Create pop-up boxes or banners: These can be especially effective right before special seasons such as Christmas or Mother’s Day when your customers are looking for gift card options.
- Leverage your email marketing list: Send out a gift card-focused promotion leading up to any big holidays.
- Promote your cards on social media: Channels such as Facebook, Twitter, Instagram and Pinterest serve as excellent platforms to get more visibility for your gift cards. They can help you expand your audience to potential customers that aren’t on your immediate radar.
- Consider targeted advertising: Social media sites such as Facebook allow you to directly target advertisements to specific locations or demographics.
Offer Buy-One-Get-One-Free Promotions
Driving sales through gift cards requires more than just telling customers about it. You have to provide a compelling reason through promotions.
One way you can do that is by offering a free gift card when your customer purchases a gift card of a certain value. “Rewarding the giver creates the opportunity to bring two gift card shoppers back to your store,” says Shelley Hunter of Giftcards.com.
If it turns out that the customer bought the card just to get a freebie, Hunter says they’re still more likely to end up spending more than the value on the card.
HOW TO PROMOTE IN STORE: It’s hard for customers to resist a value, as Katy Beck, Ginger Bay’s director of sales and marketing, found. By simply offering a $20 voucher toward any service or product of choice with a purchase of a $100 gift card, the spa was able to exponentially increase its gift card sales.
Beck advises small businesses to test the waters before diving headfirst. “Make sure to state on the offer that the gift card they get with purchase cannot be used on the same day, otherwise you may run into the problem of not being able to sustain your offer,” she cautions.
HOW TO PROMOTE ONLINE: One Canadian pizza chain went above and beyond in its buy-one-get-one-free promotion, and reaped the rewards through viral word-of-mouth:
Case Story: How Una Pizza Generated Over $115,000 in Gift Card SalesUna Pizza’s promotion for Canada’s 150th birthday (Source)
The promotion: To celebrate Canada’s 150th birthday, customers who purchased a $150 e-gift card received a free second e-gift card valued at $150. There was no limit to how many gift cards could be purchased and no expiry date.
How Una Pizza promoted it online: In the lead-up to Canada Day, Una Pizza teased its customers with the promise of a huge flash sale on social media and its website.
When the 24-hour campaign launched at midnight on July 1, the announcement was shared across social media channels, creating a viral effect reaching its customer base and beyond.
The result: Over 750 e-gift cards were sold, totaling over $115,000 in sales.
Sell Specialized Gift Cards for Special Occasions
A 2017 annual holiday spending survey conducted by Prosper Insights & Analytics predicted an average consumer spend of over $967. As extraordinary as that sounds, that’s a 3.4 percent increase from the previous year.
The survey also found that for the eleventh year in a row, gift cards remained the most sought-after gift during the holidays.
That’s why small retailers would be remiss to ignore the opportunity to boost sales through holiday-themed and occasion-specific gift cards.
Take Grotto Pizza, a family casual dining restaurant from Delaware. With most of its locations on the beach, the restaurant wanted to find a way to boost visits during winter months and create a promotional campaign to increase visits during the holiday season.
To incentivize additional spending during the holidays, Grotto offered a bonus 20 percent discount to the value of any gift card purchased in store and online. On top of that, customers also got an extra $10 free with every purchase of a $50 gift card.
Grotto Pizza’s 2017 holiday season gift card promotion (Source)
The offer starts two weeks before Black Friday and extends through New Year’s Eve. Redemption of the gift card kicks off January until March, covering its entire off-peak season.
“The gift program works; we don’t just see a one-time spike from an offer,” says Vinnie DiNatale, Grotto’s director of marketing. The promotion increased gift card sales by 20 percent in its first holiday season, and 30 percent the following holiday season.
Beyond the growth in gift card sales, Grotto has also been able to strengthen loyalty, with customers continually thanking the restaurant for extending the 20 percent reward during the holidays.
“We wanted to do something nice for our guests, and the slower winter months are the perfect time to do that,” he says. “We get some of our best results from our loyalty customers. It’s an offer they now look forward to each year as a benefit of the loyalty program.”
HOW TO PROMOTE IN STORE: Depending on the products you’re selling, you’d want to prepare for certain holidays or occasions. For example, if you’re running a women’s clothing store, gift cards for Mother’s Day would be a perfect fit. Selling fragrances and candles? You may want to consider preparing Christmas gift cards.
HOW TO PROMOTE ONLINE: During the mad frenzy of the holiday season, the “convenience factor” of simply purchasing a gift card cannot be overstated.
One of the key benefits of e-gift cards is that they can be purchased at the last minute (did you forget that Christmas present for your baby nephew?) and emailed to the recipient. And for gift givers who don’t want to deal with holiday crowds or last-minute shopping, buying a gift card online is a the perfect solution.
Takeaways and Next Steps
Gift cards provide a powerful way for small businesses to compete: If you’re not on the gift card bandwagon, it’s time to cash in. Gift cards are not just for the national chains. By implementing a series of sustained marketing strategies, gift cards have demonstrated that they can be profitable for small businesses too.
Don’t rest on your laurels: The important takeaway here is to remember to promote your gift cards year-round. Smaller businesses frequently make the mistake of “simply putting a gift card display on the counter—or worse—putting a stack of gift cards underneath the register,” says Shelley Hunter of GiftCards.com.
“When in doubt, I suggest following the example set by large department stores in making sure your gift card is visible and available in as many places as possible.”
Want to start your gift card program today?: If you don’t already have a POS system in place, you should start with that. Our short questionnaire will give us a better idea of what your business needs are so we can provide you with a shortlist of the best software for your business.
If you do have a POS system, be sure to speak to your vendor about how they can implement gift cards through your software in order to make your company gift card-ready, setting you up for increased profits and greater customer loyalty.
Communities are eager to find ways to help small businesses weather the COVID-19 outbreak. The White House and CDC are pushing efforts such as social distancing and self-quarantining. But some customers are worried about the impact these measures will have on their favorite local small businesses.
Some people have suggested ordering takeout, shopping online, and tipping extra to service workers. Another potential solution is purchasing gift cards from small businesses.
“I just bought gift cards to every one of the [local] restaurants that I love,” Luz Urrutia told CNN. “They get their cash today. And I’ll be able to use it later.”
But not all small businesses are ready for gift card sales yet. Luckily, it doesn’t take much effort to start. Here’s everything you should know about selling gift cards at your small business.
How small businesses benefit from selling gift cards
There are many reasons why you should consider setting up a gift card program. Here are the top three:
- They increase your revenue now. When a customer buys a gift card today, you get that revenue today. You collect the payment upfront and remove purchases from your stock when customers redeem their cards. This can be especially helpful in generating revenue during the coronavirus outbreak.
- They can attract new customers. Existing customers can give gift cards to a friend or family member who doesn’t know about your store. It’s a great way to promote word-of-mouth marketing.
- They boost customer loyalty. Once a customer purchases a gift card, they have to return to your store to use it. Customers may even spend more than the gift card’s balance, meaning more revenue for your store.
Grow Your Business With Gift Cards For Cash
Types of gift card programs
It may seem like all gift cards are all the same, but they aren’t. There are two primary types of gift card programs: open-loop and closed-loop.
Open-loop gift cards
Grow Your Business With Gift Cards Expire
An open-loop gift card can be purchased at one location but used at multiple locations. Common examples include Visa or Mastercard gift cards provided by select vendors. “Restrictive open-loop gift cards” may be specific to regions. Examples include gift cards accepted at businesses in a co-op or business network.
These types of gift cards provide flexibility to buyers. But they don’t always generate direct revenue to the small business issuing them. Typically, vendors print open-loop gift cards on-demand. Small business owners may have to pay a fee to use this option.
Closed-loop gift cards
Customers can only purchase and use closed-loop gift cards at your business. These gift cards provide less flexibility to the consumer but more profit to the small business issuing them. Typically, closed-loop gift cards are free to activate. Neither the small business owner nor the customer has to pay additional fees. But the small business issuing the card may need to purchase cards from a vendor, merchant bank, or point of sale (POS) provider.
Gift card laws to keep in mind
Before you start your gift card program, familiarize yourself with the applicable federal regulations.
The 2009 Credit Card Accountability Responsibility and Disclosure Act (CARD) sets standards and consumer protections for gift cards. Most importantly, the law prohibits gift cards from expiring within five years from the date of activation. It also limits inactivity fees, except in some circumstances.
Additionally, gift card laws can vary by state. Check the National Conference of State Legislature’s website for any applicable gift card laws in your area. Or reach out to a legal professional for more comprehensive advice on gift card laws.
How to sell gift cards in 4 steps
Now that you understand more about gift cards, your small business is ready to set up a gift card program.
1. Choose your gift card system
Choose how you plan to process your gift card orders. For many small businesses, the easiest option might be to use whatever gift card option is in their POS system. You can also purchase them from vendors and create a new “item for sale” in your POS system. Another option is to buy them through a bank that offers the service. Once you choose how you’ll process cards, you’ll need to order them. You have a few options.
Online or e-gift cards
By partnering with your POS system provider, you may be able to offer gift card purchases online. Just like any e-commerce transaction, items are processed online. When customers are ready to purchase in-store or online, they can print e-gift cards or show them to you on their smartphones. Your business may only have to pay a small processing fee but won’t have to worry about purchasing physical gift cards. Most commonly, these cards will appear as a barcode, an identification number, or both.
Grow Your Business With Gift Cards Delivered
Gift certificates
While a bit of an old-school option, you can use gift certificates if you don’t have a POS system that can track gift cards. Instead, you can print your certificates and track purchases in a digital ledger or create a new line item in your POS system. Some businesses also use a mix of gift cards and gift certificates. For example, a spa might offer a gift card for any purchase and a certificate for a “free massage.” However, gift certificates can be easy to counterfeit and aren’t the safest or most reliable option.
Electronic strip or barcode gift cards
The last option is a physical gift card, ordered from your POS provider, a merchant bank, or a third-party vendor. These cards often look like credit cards, with magnetic strips or barcodes and identification numbers. Many vendors will provide you with customizable options so that you can include your brand information on the card. Although they can be a pricer option, customers may prefer the physical card over a paper certificate or e-card.
2. Input gift cards into your system
Each POS system will have a different method for inputting your cards, but they’re all similar. Scan or swipe a blank card. You’ll be prompted to choose the amount of money for that card. Your customer will pay the amount on the card to complete the transaction. When customers come in to use a gift card, the gift card should appear as an option for tender in your POS system.
3. Establish gift card policies for your team
Once you have your POS system set up for gift cards, tell your team how it works. Share how to process gift card transactions and how customers can make purchases with gift cards. You’ll also want to inform them of any limitations you have on gift cards. Policies might include limiting the number of gift cards customers can purchase or not allowing customers to buy gift cards with gift cards. Other things to consider are how to track purchased cards and set expiration dates that follow federal guidelines.
4. Start selling and tracking gift cards
Now that your staff is on the same page, you can start selling gift cards online or in your store. If your POS system allows, you might track gift cards by attaching them to customer profiles in your system.
As your small business sells gift cards, you’ll be able to accept those profits upfront. Your customers will be happy to support you and look forward to shopping with you in the future. Gift cards can be a great way to generate revenue in challenging times.
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