This week, we have returned the focus of the Canadian POS Corporation Blog to the selling of gift cards. As far as we’re concerned, all retailers and restaurants across Canada should be selling them. And most of them do. There are, however, many small businesses that are yet to cash in on this very popular way to generate sales. If you haven’t yet begun to take advantage of selling gift cards, you’ll want to consider the following benefits.
Here are three more:
1. They easily increase profits. When you sell a gift card, you immediately earn money. But what have you sold? Has an actual product actually left your store? No. Instead, you have a promise that someone will be back to retrieve the item or items that the gift card represents. But are those promises always kept? No. That means that with each gift card sale, you are making a profit. Sometimes, it will be like making money by selling nothing at all!
“When a customer buys a gift card for $25, $50, $100, or a larger amount for themselves or as a gift for a loved one, it’s like an immediate sale,” explains 1800Accountant.com, “This holds true even if the gift card is never used in the future. Plus, it does not impact your inventory, and it’s a great way to give purchasing power to customers who want to choose their gifts rather than being handed something they aren’t in love with.”
2. They increase your referral rate. During our discussion of gift card benefits in our last blog, we asked the question “Is there a better way to recommend your store?” We can’t think of one. When someone offers one of your store’s gift cards to a loved one as a gift, it’s the ultimate way of saying “this is a great place to shop”. It’s often been said that there’s no better type of promotion than word-of-mouth promotion. And gift cards are the ultimate way to spread the word!
“Referrals from your best customers are one of your greatest tools for generating new, loyal customers,” says Rita Harris on TryItLocal.com, “These individuals are already wonderful advocates for your business but with gift cards available, you give them the ability to put their money where their mouth is. They won\’t just tell their friends and family about your business, but they will send them to you and even foot the bill for it.”
3. They keep money in your store. How so? Well, let’s take a look at your return policy. Typically, stores will provide refunds to customers when they make returns and those refunds are generally processed using the methods of payment used by the customers. Giving cash back to a customer or placing a credit on his/her credit card can be replaced by providing a refund via a gift card. Doing so will make sure the money is spent in your store. Offer it as an option.
“Larger retail outlets often give out gift cards to customers who go to a store to return a certain item but do not have a copy of their receipt with them,” explains 1800Accountant.com, “Simply offering customers a gift card is much easier than having to look up a transaction that the customer made. Plus, it’s a great incentive to customers by giving them a reason to come back and give your retail outlet a second chance.”