It’s the winter holiday season, and for many consumers that means serious shopping. In fact, sales for this November and December are predicted to top $730 billion. What’s topping the lists of many holiday shoppers? Gift cards.
Further, consumers are planning to buy 3 to 4 gift cards with an average value of $47. That’s a total estimated gift card spend of $27.5 billion for this holiday season.
If your business doesn’t offer gift cards, you’re not getting your piece of that pie.
If you’re not quite convinced gift cards are right for your business, this article will help. We’ll take a look at 5 reasons your business should start offering gift cards right away, plus 5 strategic ways you can use them this holiday shopping season to get in on the action.
Here’s why gift cards are so great.
Shoppers like gift cards
Almost 80% of surveyed shoppers plan to give a gift card as a holiday gift, and another 80% said they’d be thrilled to receive one. What’s more, 54% of consumers surveyed put gift cards at the very top of their holiday wish list this year.
What’s not to like? Magnetic-strip cards are compact and durable—perfect for popping into envelopes, stockings and gift boxes.
If you’re not offering gift cards, you’re leaving over half of holiday shoppers in the cold. (And you’re leaving revenue on the table.)
You get paid now
Gift cards are an ideal sale.
There’s no up-front impact on inventory. There’s nothing to deliver right now. Even in the middle of holiday shopping chaos, you can sell gift cards by the dozen with minimal impact on day-to-day operations.
Except for profit. You’ll make your money now.
And because gift cards offer recipients control over the gifts they select, there will be fewer unwanted holiday gift returns. That means you’ll be less bogged down now and later.
Gift cards attract first-time customers
Gift cards often draw new customers to your business. Everyone who receives a $50 gift card to your story as a holiday present has a $50 reason to visit. That’s your chance to turn a one-time customer into a regular.
Said another way, gift cards are basically a form of free advertising. In fact, when you really think about it, your customers are paying you to advertise for you when they buy gift cards.
People with gift cards spend more
On average, consumers spend 59% more than the value of their gift card. That means you make the initial revenue of the gift card sale, but you’re likely to make even more when the gift card gets used.
Here’s the best part. You don’t have to upsell or do any kind of special marketing to make this happen. Consumers tend to see gift cards as free money, so spending more than the value of the cards still feels like a deal to them.
And it is. Plus, it also boosts your bottom line.
(Some) gift cards are super secure
Let’s say you’ve never sold gift cards before. Can you design something yourself and crank out several dozen on your printer? Sure. And that makes it ridiculously easy to offer gift certificates immediately.
But it’s not the most secure option. (After all, how hard would it be for someone else to make copies?)
Magnetic-strip cards, on the other hand, offer more protection against counterfeiting. And your payment processor likely makes gift cards available to you. We strongly recommend the more secure option over simple paper gift certificates.
Start using gift cards right away
Ready to start offering gift cards? Check out 5 tips for offering gift cards now.
1. Set up your POS
Odds are, you already have a POS system. If not, no worries. Today it’s easier than ever to find a partner who’ll set you up with a POS system.
Just be sure to look for one who’ll also be available to answer your questions, help you build your program, and guide you through any snags you run into. Learn more about POS systems and how you can start accepting credit cards—and gift cards—in as little as 2 days.
2. Get the word out
Your gift card program can make a big difference in holiday sales—but only if your customers know about it. So get the word out on social.
Tweet about it, post on Facebook, or add a pin on Pinterest. Let your social followers know you offer gift cards… and offer ideas on how customers can use them.
Don’t forget to email everyone on your email list, too.
3. Offer gift ideas
How you market your gift cards is the key to selling them. So get creative.
Encourage shoppers to pick up extra cards to avoid the inevitable forgotten holiday gift. Or suggest that shoppers treat themselves to a gift card as a post-shopping treat.
You can also use gift cards as promotional giveaways. For example, give away a $10 gift card free with every $100-dollar purchase or give a $5-dollar gift card to each customer who buys a $50 gift card.
4. Make gift cards easy buys
Whether your business is a book shop, a salon, a cafe, or a yoga studio, placing gift cards where customers pay is crucial to making them a simple add-on purchase.
For a little extra holiday cheer, deck out your gift card display with lights or a gift card tree. And don’t forget to offer those little extras that make gift cards ready-made, last-minute gifts—envelopes, note cards, stamps and pens.
5. Know the laws
Each state has documented laws about gift card expiration. Know what they are for your state and make sure you follow proper accounting procedures for tracking outstanding gift card credit as it ages.