Over the years, gift card sales have steadily gone up and it’s projected to reach the $160 billion mark by 2018. It doesn’t really matter if you have just opened a new store or if you have been running a successful retail outlet for years. Plastic gift cards can potentially boost business and bring you fresh customers. Contrary to popular belief, gift cards are not just for big box stores. Local retail outlets and other small businesses continue to utilize gift card programs to great effect. Here are 5 reasons why your home business could only gain if you start offering gift cards to your customers.
Not All Gift Cards Get Redeemed: As much as 30% of all gift cards purchased online or at the stores never get redeemed. This mostly happens because people receive numerous gift cards during the holiday season and they simply forget to redeem a few cards or end up losing them. Long story short, the revenue generated from selling these cards generate a pure profit as they are sometimes never exchanged for any products or services. Most store owners and e-commerce sites are aware of this fact and they use it to boost their bottom line.
Customers Usually Spend More Than the Gift Card Amount: Most customers who walk into a store or restaurant with a gift card end up spending more than the amount on the card. This is equally true with eCards, as customers use them to score a discount on a much larger online purchase. In fact, almost 72% of all customers who redeem a gift card shop for more than the value of the card. This is mainly because a lot of customers are susceptible to impulsive buying and they overshoot the amount on the card. There are also some people who are embarrassed to simply walk into a store and redeem a gift card without making any purchases themselves.
Gift Cards Encourage New Customers to Walk In: When a person receives a gift card, they are forced to visit the store to redeem the card. This means the online store, home business or physical retail outlet gets a customer who would have otherwise never visited. This presents a fresh opportunity to turn this customer into a loyal customer.
Manage Dissatisfied Customers, Retain Loyal Ones: One of the regular challenges of both online and retail store management is handling dissatisfied customers. Gift cards can be used as a peace offering to manage a disappointed customer and prompt a return visit. Apart from managing dissatisfied customers, gift cards can also be used to retain loyal customers. They can be given away as gifts to regular customers to ensure they remain loyal to the brand.
Encourages Return Visits: One of the best things gift cards do is that they encourage customers to visit. This means from every gift card sale you are presented with at least two walk-ins. One when the gift card is bought and another one when it’s redeemed. High-value gift cards can result in several walk-ins as shoppers keep coming back to redeem the full value.
