As a business owner, you may have considered implementing a gift card program, but worried that doing so would be more trouble than it’s worth. After all, your paper gift certificates have worked just fine up until this point. Would plastic gift cards really have a measurable impact on your business? Would your customers appreciate the benefits of a plastic gift card? Read on for the answers to these questions and more.
Myth: Gift card promotions don’t help sales.
Fact: Flash gift card promotions can boost your business. Let’s take a look at restaurant Tipsy Turtle Pub & Eatery as an example. The Pennsylvania sports bar offered a Black Friday gift card promotion that was so successful that they sold $45,000 worth of gift cards in just two hours! Also, same store sales increased by 20 percent and regular gift card sales increased by 500 percent as a result of the promotion.
For the promotion, the Tipsy Turtle offered gift cards at 50 percent off for just two hours on Black Friday. They advertised this great deal for two weeks leading up to the big shopping day. While offering gift cards at half off may seem counterintuitive to boosting your revenue, the example of the Tipsy Turtle certainly shows how such a great gift card promotion can create buzz- and profit.
Myth: My customers don’t care about gift cards.
Fact: Customers love giving and receiving gift cards- 93 percent of U.S. consumers purchase or receive a gift card annually. Digital gift cards in particular make a great last-minute gift idea, since they are instantly emailed directly to the recipient. So leverage your social media followers and email list for gift card promotions. Consider running a 10 percent off sale for holiday gift cards for your social media followers and email subscribers in the days leading up to the holiday.
Myth: Discounting gift cards takes money out of our pocket.
Fact: Giving bulk discounts to businesses and organizations expands your customer base. Let’s take a look at Fuzziwig’s Candy Factory for a great example of how this works. The Midwestern candy emporium replaced their long-standing paper gift certificates with plastic gift cards. As a result of this shift, Fuzziwig’s saw a substantial increase in their commercial customers as companies began to purchase the plastic gift cards to use as employee rewards and incentives.
As part of this commercial customer strategy, Fuzziwig’s offers local businesses a discount on bulk gift card purchases during the holidays for employee gifts, and throughout the year for work anniversaries, incentives and employee retirements. You can do the same thing, and get the word out by distributing promotional materials at local business networking events.
Myth: Gift cards are too expensive to implement. I’ll just use paper certificates.
Fact: Paper certificates can end up costing a business far more in the long term. They are too easy to duplicate and lose track of – plus they can result in lost revenue. For example, Fuzziwig’s Candy Factory lost money when dishonest employees gave out paper certificates to friends. Preventing this type of fraudulent activity was one of the drivers for the company to switch to the more secure plastic gift cards. Replacing paper certificates with plastic gift cards can help you prevent this type of fraud and loss at your business, too.
Myth: Digital gift cards aren’t secure.
Fact: Digital gift cards are actually very secure. For one, there is no physical packaging to tamper with, so unlike paper certificates, they are harder to steal and easier to replace if lost. If a customer’s smartphone is stolen, however, no one should be able to redeem their digital gift cards without their fingerprint or passcode. And, if a consumer gets a new phone, their digital gift cards should transfer along with the other information on their original device. With most retailers, digital gift cards are fairly easy to trace and replace if the recipient can’t find the original gift card notification.
Myth: People won’t spend as much when they have a gift card.
Fact: People spend more – and come back more often – when they have a gift card. In fact, 72% of customers will spend more than the value of their card, and recipients will spend 20% more on average than the value of their gift card.
What’s more, people are less likely to exclusively shop the sale racks or seek out discounts when they feel that they aren’t spending their own money. All of this behavior results in more revenue for your business.