Gift cards are often associated with the holiday shopping season and for good reason. Gift cards and e-gift cards make perfect gifts for birthdays and gift-giving holidays such as Christmas. Yet the true benefits of gift cards for small businesses can be reaped all-year-round. Gift cards enhance customer experience, help to expand your existing customer experience, and drive business all around.
With this in mind, today we will be discussing how gift cards build loyalty, improve brand awareness, turn your customers into brand advocates, improve cash flow, and how small businesses can successfully implement a custom gift card program.
Gift Cards Build Loyalty and Brand Awareness
In a certain sense, gift cards are just business cards that your customers pay to own. That may seem like a strange perspective, but imagine the value you could get from your loyal customers handing a business card to their friends and family members and saying, “Hey, ever heard of this place?” Now imagine that scenario, but with the business card having free money for you to shop. Pretty sweet deal, right? There are two key marketing benefits when customers purchase gift cards and/or e-gift cards.
Brand awareness: getting your brand out there is a huge deal for businesses of all sizes. Gift cards build brand awareness organically through gift-giving. An ad comes from the voice of the business; a gift card comes from the voice of a trusted friend.
Customer loyalty: in a similar sense, the gift-givers and gift receivers are far more likely to return to your shop and spend more than the balance on their gift card. Satisfied customers turn into repeat customers, and those repeat customers will hopefully turn into brand advocates.
Gift Cards are Great for Cash Flow
An often overlooked benefit of selling gift cards and e-gift cards is that your business will receive a cash influx upfront without inventory going out the door. Granted, this can be a double-edged sword. Selling a huge amount of gift cards during the holiday season must be accounted for when those gift cards start getting redeemed the next month. However, as any business owner will tell you, money now is worth far more than money tomorrow.
We already touched on the idea that the majority of gift card recipients will end up out-spending their allotted card balance. This is great for business as you have essentially now made two sales out of one gift card. Another key component to the economics of gift cards is the amount of cards that go unused. In a recent survey, consumers revealed that:
Approximately 75 percent of gift card recipients report that they always use gift cards.
20 percent of those surveyed reported that they forgot to use their gift cards.
29 percent of those surveyed reported that they have received a gift card which they never used.
The total amount of unredeemed gift cards exceeded $970 million in 2015.
The great news for small businesses is that all of these scenarios are a win! If your gift card recipients do not use their gift cards, that is a short term win. If your gift card recipients choose to use their gift cards, you may have just earned new business and likely made a bigger profit in the process.
Using a POS System to Accept Gift Cards
So how can your small business take advantage of the power of gift cards? Thanks to the power of Clover, this process is relatively straightforward. With a Clover POS system, business owners can use the free app Gyft to create and implement a customizable gift card program. There are three basic steps to implementing any gift card program:
Create and design your gift cards. Whether you will be using e-gift cards or physical cards, designing the appearance and other brand details is step one. Most physical gift cards will either use a magnetic strip or a barcode.
Integrate your gift card program into your point of sale (POS) system. With Clover, this step may blend with the creation of your gift card. Many POS systems support gift card acceptance. This allows your business to load custom or predetermined amounts onto each card.
Start promoting your gift cards! This step is all about getting the word out. Some businesses may choose to include gift card promotions in social media/ad materials. Others may simply choose to set up a gift card display at checkout.
Businesses that commit to a strong gift card program improve customer retention, brand loyalty, cash flow, and much more. When it is so easy to set up a customizable gift card program for your business, what do you have to lose?
True Merchant Gift Card Processing Solutions for Small Businesses
At True Merchant, we are here to help businesses of all sizes with all of their payment processing and security needs. Our programs are fully integrated with Clover for an easy implementation gift card and other customizable programs. Lean on our decades of experience working with small businesses to identify and meet their unique merchant account needs. True Merchant is proud to offer a full suite of products and services including CardSecure, ERP, credit card processing, and much more!
To learn more, give us a call or email today so we can discuss how exactly True Merchant can help your business!