Why a gift card solution is vital to your business
Although the holidays are over, merchants are still seeing the residual actions of holiday shopping. The first months of the New Year are always a time of returns and exchanges – and using gift cards to make new purchases. Always high on the gift list, virtual money makes the shopping process easy for the givers and the buying process easy for their receivers.
While gift cards have their perks for consumers, they also have big benefits for their respective businesses. One of the foremost advantages is that many cards go unredeemed, resulting in additional profits for retailers. In fact, $44 billion worth of gift cards has gone unused since 2008.
Let's take a look at some of the reasons why businesses should continue to sell gift cards and implement a POS solution that accepts them:
Reduced price sensitivity
When customers are looking to make a purchase, they often have a mental limit regarding how much they want to spend for a particular item or an entire transaction. With gift cards, consumers are less sensitive to price because it feels like they're not using their own money. As a result, these consumers will look at more regular-priced goods and services instead of working their way through the clearance section. They are also more likely to exceed the amount on their gift card. Since consumers are less worried about the expense related to the items they want when they're paying with virtual money, companies stand to make a higher profit.
Increased brand awareness
Companies are always looking for new and innovate ways to educate consumers about their businesses. With gift cards, the reward for a business is unmistakable. Whether it's the recipient requesting virtual money from a specific business the gift-giver has never heard of or the purchaser essentially recommending a new store to the future redeemer, gift cards attract new customers. The more these cards are dispersed among consumers and their peers, the more a brand can gain greater awareness.
Improved mobile versions
Customers understand the plastic gift card: with a swipe, they can redeem the amount of money that was purchased for them. However, now that consumers are becoming more comfortable with mobile-friendly shopping, more virtual money is finding a home through online platforms and contactless payments. With tools like Apple's Passbook, consumers can store gift cards on their mobile devices and quickly access them while in store.
This method enables shoppers to use their gift cards at any time since the money is always on hand. As a result, retailers can recognize the revenue gained from cards faster and may even see customers spend more than their allotted amounts. Additionally, virtual money is a strong way to attract new clients to an organization. Since the codes for redemption are usually emailed when uploaded onto mobile devices, businesses will gain the recipient's contact information, allowing for further communications to promote shopping incentives.
From gaining brand awareness to attracting new customers to improving sales, gift card processing offers companies many advantages. Still, to get all of the benefits, organizations must first have the tools in place to make the rewards of gift cards possible. Implementing a gift card program and using the right POS system for accepting mobile payments, businesses can receive the gifts of virtual money all year long.