8 Reasons Your Business Needs To Offer Gift Cards

EVO Payments, US on 10/14/2021

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. There are dozens of studies to demonstrate that this payment option lets businesses cash in on numerous benefits, in terms of revenue and customer impact.

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

#1 – Fast ‘n’ Easy

When your customer is running late to a birthday celebration and drives past their favorite store (yours), their sense of relief can be a beautiful thing. By offering gift cards, you are providing a solution that saves both time and effort. Not only have you made another sale, you’ve strengthened the customer relationship by solving that problem for them. Gift cards are the perfect way for busy people to show that they’re invested in friendships, even if they don’t have time to sift through a catalogue.

#2 – 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]. This can be a great boon for businesses that wish to bring in new faces.

#3 – Gaining Popularity

This form of payment has come a long way since the years when paper certificates with carbon duplication were best-in-class. According to the National Retail Federation, gift cards have been the #1 item on gift recipients’ wish lists for over a decade; they’re requested by 59% of survey respondents[ii]. Additionally, 74% of consumers buy gift cards from small businesses on a regular basis[iii].

#4 – Eliminate Concerns About Selection

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

Picking a knickknack for someone’s home obligates them to display it. A book or movie selection might be far off-base from their actual taste. And heaven forbid someone should receive the wrong clothing size!

It just makes sense to let people choose their own present, and having this option available takes 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 card with only 88 cents remaining[iv]. A small balance can make a big impact on foot traffic! And then, of course, they are likely to spend more than the remaining amount, which brings us to #6.

#6 – Spending Above The Card Value

When using gift cards, people tend to spend more money than they were gifted. In fact, 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 a big total has already been given to them.

#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. Sometimes they simply disappear to wherever missing socks go. That is bad news for the recipient, but potentially good news for retailers. Even temporarily misplaced cards can improve cash flow, as they generate revenue months in advance of 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 just 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 in to this payment model? Well, anecdotally, some have cited concerns about cost, either in terms of set-up fees or monthly processing. But that objection isn’t wholly logical, as those costs—like any practical business expense—should be viewed as an investment that will pay dividends once the program is established.

The most frequent objection is that owners feel they don’t need gift cards for their business. But after one has investigated these and other publicly available stats, it’s clear that gift cards are a home run for most types of retailers and many service providers.

Getting started with EVO Gift is easy. To learn more about how it might fit your business model, call 1-866-348-6520.

[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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