8 Reasons Your Business Needs To Offer Gift Cards

Customers have come to expect the simplicity and convenience of gift cards, but some businesses still choose not to make them available. Whatever the reason, missing out on gift card sales can be a costly mistake since many studies indicate that this payment option lets businesses cash in on numerous revenue and customer impact benefits.

 

Here are a few of the reasons gift cards might be a fantastic fit for your business model:

 

#1 – Introduce New Buyers to Your Brand

90% of shoppers who receive a gift card from a small business they’ve never visited say that they will try the business and they will likely return in the future [i]. Offering gift cards is a simple way to increase brand awareness and can be a great boon for businesses that wish to bring in new faces.

 

#2 – Fast and Easy

By offering gift cards, you provide a product that saves time and effort. Not only have you made another sale, but you have also secured a future customer visit when the gift card is redeemed. In addition, gift cards are the perfect way for busy people to show that they’re invested in their ships, even if they don’t have time to sift through a catalog or shop throughout your store.

 

#3 – Gaining Popularity

According to the National Retail Federation, gift cards have been the #1 item on gift recipients’ wish lists for over a decade, requested by 59% of survey respondents [ii]. Additionally, 74% of consumers regularly buy gift cards from small businesses [iii].

 

#4 – Eliminate Concerns About Selection

Choosing the right present sometimes feels less like joyful generosity and more like tiptoeing through a minefield.

Picking a knickknack as a gift may obligate the person to display it. A book or movie selection might be far off-base from their preferred taste, and heaven forbid someone should receive the wrong clothing size!

When you are unsure what to gift someone, it makes more sense to let them choose their present, and having this option available removes the pressure off everyone involved.

 

#5 – Multiple Visits

Survey data indicates that 4 out of 5 respondents will return to spend the rest of their gift cards, even if there is less than a dollar remaining [iv]. A small balance can make a significant impact on foot traffic! Then, of course, they are likely to spend more than the remaining amount, bringing us to the following reason businesses should sell gift cards.

 

#6 – Spending Above The Card Value

People tend to spend more money on one transaction when they are using gift cards. 65% of shoppers will spend, on average, 38% more than the card’s value. [v]

“When you get a gift card, you tend to think of it as free money, and you splurge a little bit,” says Timm Walsh, Chair of the Board of Directors for the Retail Gift Card Association.

Gift cards can also create opportunities for merchants to move big-ticket items since customers feel that part of the total cost is covered.

 

#7 – Unspent Balances Add Up

In some homes, partially spent gift cards are carelessly tossed into the back of a junk drawer or the bottom of a glove box. That may not be good for the recipient but potentially good for retailers. Even temporarily misplaced cards can improve cash flow, as they generate revenue months before providing goods or services.

According to recent data, about $3 billion in cards go unredeemed every year, and up to 3% of gift card dollars are never redeemed at all [vi].

 

#8 – Minimal Use of Space

Retailers know shelf and display space are valuable. Whether your company does complex calculations to determine ROI per square inch or whether you eyeball it, you can be sure that a gift card display is a wise use of space.

 

Undeniable Benefits

With all of these benefits, why would a small business owner choose not to opt into this payment model? Well, anecdotally, some have cited concerns about the cost of set-up fees or monthly processing. However, that objection isn’t logical, as those costs—like any worthwhile business expense—should be viewed as an investment that will pay dividends once the product starts selling.

The most frequent objection is that owners may think they do not need gift cards for their business. Still, once they have investigated these and other publicly available stats, it’s clear that gift cards are a home run for most retailers and many service providers.

To learn how gift cards might fit your business model and how to get started with EVO Gift, call 866-836-1785, Option 2.

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[i] https://newsroom.fiserv.com/news-releases/news-release-details/2019-small-business-gift-card-study-highlights-benefits-smbs

[ii] https://nrf.com/media-center/press-releases/holiday-shoppers-plan-spend-4-percent-more-year

[iii] https://newsroom.fiserv.com/news-releases/news-release-details/2019-small-business-gift-card-study-highlights-benefits-smbs

[iv] https://www.giftcards.com/gift-card-statistics

[v] https://www.creditcards.com/credit-card-news/7-things-need-know-about-gift-cards-1271/

[vi] https://www.cbsnews.com/news/unused-gift-cards-add-up-to-3-billion-annually/

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