The largest retailers like Target, Walmart, and Nike offer gift cards. Your business should offer them too. A gift card program can boost revenue, grow your customer base, and increase foot traffic. Here's how to get your gift card program off the ground.
A gift card program offers many benefits for small businesses. Gift cards are increasingly popular with customers and gift card purchases are expected to reach $160 billion this year. There are additional benefits even after the gift card is sold. According to some studies, 75% of customers that redeem gift cards overspend the value of the card, while 44% visit stores they otherwise wouldn't. That means more foot traffic and more future customers. A gift card program is a simple and easy strategy for retailers to increase revenue.
There are two types of gift cards: open loop cards and closed loop cards. Visa or American Express gift cards are open loop cards. They are tied to a bank and are accepted virtually anywhere. Most retailers will offer closed loop cards only accepted at their establishment. Most modern credit card terminals are designed to accept a closed loop gift card but some POS services need a separate scanner. The gift card is associated with a specific balance in the POS system that is debited at each purchase. Once the balance is exhausted, the card can no longer be used.
3. How To Launch A Gift Card Offering
There is no need to develop your own gift card services. Many retailers outsource this function to specialized payment or credit card processing firms. Those partners can support gift card merchant services along with your existing payments. Contact Velocity Merchant Services at 888–902–6227 and we can make you an attractive and professional gift card for your business or get you some FREE digital gift cards. You can also set terms or restrictions on your gift cards. That might be a specific range of gift card values or limiting gift card purchases to specific product categories. Gift cards can be tailored to your specific business and growth strategy.
Gift cards are a proven, low-risk method to boost your revenue. A well-planned gift card program can increase foot traffic and grow your customer base. These programs can be managed by outside partners that already support your credit card services. If you don't offer gift cards, you're leaving money on the table.
Finally, there are many ways your business benefits from offering gift cards. As far as small businesses go, offering gift cards in the first place makes you stand out among customers. This is especially true in a time when many small business owners simply elect not to offer gift cards. Whether they believe them to be too complex, time consuming, or ineffective, the truth is that they bring new business to small business doors and that’s something you should never ignore.
Additionally, customers like gift cards. Incentive Magazine reports that consumers spent roughly $46 billion on gift cards during 2016 and those numbers are expected to grow before all is said and done this year. Offering gift cards to your customers increases engagement, reduces fraud (by getting rid of paper certificates that were far too easily counterfeited), and boosts sales for small businesses.
The question isn’t whether your business can afford to offer gift cards to your customers. With the ease of POS systems like Clover Mini for creating, recording, and tracking gift card transactions, the real question is CAN you afford NOT to offer them?