There’s really no bad time to sell gift cards in your store. While the end-of-year holiday season (when gift cards sales are at their highest) will always mark the busiest time of year for all types of retailers, there’s no reason to assume that gift cards won’t sell all throughout the rest of the year.
There are year-round reasons for your customers to be giving out gifts. Easter and Passover are just around the corner. And we all know that each and every day, someone is celebrating a birthday. So why are you not yet selling gift cards to your customers? Doing so makes your business better!
Gift cards are more lucrative for your business than gift certificates.
On DataCandy.com, marketing specialist Andrew Cauthorn outlines how much better gift cards are for your business than gift certificates. The main reason, he insists, is that gift certificates will end up costing you money that gift cards do not.
“Picture this scenario,” he writes, “I come into your establishment, purchase something of lesser value than my gift certificate, and what do you give me in return? The cash difference. Now, imagine I return that purchase. Most establishments would also give me cash instead of a gift certificate. Gift cards guarantee a certain amount of revenue because you can’t exchange a gift card for cash. Moreover, if you return an item, it’s credited to your gift card. And as if that wasn’t enough, a gift card is also re-loadable, while a gift certificate is not.”
Gift cards help you to attain “mini loans”.
Let it not be lost on you that with each purchase of a gift card in your store, you earn money for items that haven’t even been sold yet. Naturally, it requires a gift card recipient to enter your store to use that gift card in order for the purchase to be complete. In other words, selling gift cards is like receiving mini loans. You’re being paid in advance for your goods. As Tom Sullivan of LEAD Marketing Agency puts it, a gift card sale gains you a “pre-paid reservation”.
“Who doesn’t want to be paid up-front for their products and services?” he asks, “$46 billion was spent on gift cards in 2016. $28 billion on others. $11 billion on themselves. $7 billion by employers to employees.”
Gift cards help to increase transaction sizes.
Yes, gift cards are generally sold in particular denominations such as $10, $25, $50 and $100. But don’t assume that a gift card sold in any of those amounts will result in transactions that cap at those numbers. The majority of gift card purchases exceed the amounts of the card values. That means that with every gift card you sell, you significantly increase your chances of enjoying a forthcoming larger sale.
“The majority of gift card holders spend more than the card value,” confirms Cauthorn, “If the gift card holder knows they won’t see any of the value in cash, you can bet they’ll try to spend it all – with a good chance they’ll spend even more. You’re more likely to spend some of your own money if the gift card covers the majority of the cost.”
At Canadian POS Corporation, our electronic gift card solution maximizes stored value card sales with a complete package of marketing features. For more information, call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.