Do you know that gift cards account for more than $100 billion sales per year? You should not assume that gift cards can only be used effectively only in big businesses. More and more small business owners are adopting the utilization of gift cards and they have attested to the fact that gift cards have a positive impact on the growth of their businesses. If you are wondering why you need to start accepting gift cards in your store, here are some of the reasons why you should make it a priority for your business today.
Get paid upfront
Most people prefer buying gift cards for their loved ones instead of buying actual gifts that may not turn out to be what the other person likes. They allow their loved ones to shop for themselves and get what they want and need. What this also means to you as a store owner is that you receive cash upfront, which you can spend on operating expenses or stock more inventories.
Generate higher revenues
When one customer buys a gift card for another, that means you are guaranteed of more sales in the near future. This is an inexpensive way to advertise your store and it is also just as effective as the word of mouth. Some people who come to redeem their cards might have never been to the store before and this is a great way to introduce them to your business. This means more customer traffic in your store and in turn higher revenues.
Sell more merchandises
Research shows that customers who come to redeem gift cards usually end up spending 38 percent more than the value of their cards. This means that your inventory can move fast and you chalk up more sales. You can use this opportunity to introduce your latest merchandise to consumers. A customer is more likely to buy a product they see firsthand. In turn, they spread the word to friends who tell more friends.
Get customer information for research purposes
Gift cards allow a store owner to get additional information on customers and contacts. A store owner can use this information to track the spending patterns of their customers and this helps them to come up with effective marketing strategies. With permission, they can also keep their customers updated on the latest merchandise in the market.
Paper gift certificates can easily be forged and the only way to avoid such is to adopt the use of plastic cards which cannot be easily duplicated. You can have your gift cards custom branded to give the store’s important information like phone numbers and location. This also gives a better impression of your store and which means more sales. Since money is paid upfront for one to acquire a gift card, this reduces the number of fraud cases that occurs due to credit card transaction cancellations.
Not all customers redeem the full amount on the cards. This is the same reason why casinos use tokens instead of cash. There are different spillage rates that apply to unclaimed gift cards but even a one percent balance can add value to your store, don’t you think so?