The Gift Card industry is a very huge one which has been predicted to reach $2,076.51 billion by 2027.
A Gift Card is similar to a bank debit card which allows you to carry out transactions both online and offline, given that the monetary value on the card covers the cost.
Many business brands have subscribed to the idea of Gift Cards for so many reasons. One of the major motives why businesses issue Gift Cards is to create a chance for customers to advertise the brand with their friends and family.
Customers often prefer to use Gift Cards because it’s a more convenient way to make in-store purchases or online purchases in the absence of cash.
Also, according to a report, about 42% of customers end up spending more with Gift Cards than they would have done normally. Therefore, Gift Cards are undoubtedly a good way to increase business revenue through the higher-than-average orders placed ny customers.
How does having a Gift Card for your retail business sound to you? Great, right?
This article will give you an overview of the many benefits of Gift Cards, and how to create them in your business for running a profitable business.
Benefits Of Accepting Gift Cards As Payment
The benefits of Gift Cards to both businesses and customers are numerous but as a business owner, here are some benefits you’ll enjoy from accepting Gift Cards as a payment method;
1. Increase Revenue:
Apart from the revenue generated from the Gift Card when they are purchased, they also present an opportunity for more revenue upon redemption.
Since many shoppers see the Gift Card as “free money”, they are likely to buy the expensive items in the store.
Also, it has been revealed that 61% of consumers spend more than the value of their Gift Card, averagely overspending of $31.75
This reason is why big retailers like Amazon, Macy’s, Best Buy, Home Depot etc all integrate Gift Cards as a business strategy.
2. Attract New Customers:
Gift Cards can help attract more new customers to your business. When your customers buy the card for friends and family who were not familiar with the brand, they are more likely to redeem the Gift Card in your store, hence increasing your customer base.
You can use Gift Cards for fundraising events which will boost your brand recognition and further gives you a good reputation of being a philanthropic business owner.
3. Attract Organic Traffic To Your Website:
According to research by Gift Card Granny, almost 40% of consumers prefer digital Gift Cards over physical card because it doesn’t require them to visit the store.
The users can just purchase the card through your website and save themselves the trip of coming over, also, increasing the number of visitors that visit your website.
4. Increase Customer Loyalty:
Gift Cards promotions are a good strategy to increase customer loyalty. For example, you can offer a free $10 gift card to customers who purchase $100 in Gift Cards.
A purchaser will likely spend more money on buying extra Gift Cards which will boost your sales too.
This offer can be limited to a short period, maybe during the holidays.
How To Create A Gift Card For Your Business
1. Get a POS System That Accepts Gift Cards:
If you want to start creating Gift Cards for your business, the first step to take is getting a point-of-sale (POS) system to sell and redeem the Gift Cards.
You will easily create, promote, send and track Gift Cards by setting up a Gift Card system through your POS because it’s already linked with your store and website.
Check out a reputable POS company like Shopify, purchase the POS and activate the Gift Card feature. The system will keep track of every Gift Card you sell and send the customers a unique Gift Card code they can use to redeem it via their email.
Ensure your POS system can account for all Gift Card sold, as well as track sales.
2. Know The Gift Card Laws:
The laws and regulations guiding Gift Cards depend mainly on the region. To avoid violating any law in ignorance, you should consult a legal expert for more clarity.
For example, in California, you’re not allowed to add an expiration date to Gift Cards.)
Also, the National Conference of State Legislatures provided clarity about Gift Card laws in each state, which is based on the CARD act of 2009. The law prohibits Gift Cards from having an expiration date within five years of their issue which also prevents the users from being charged inactivity fees for not making a transaction for long.
3. Create Physical And/ Or Digital Gift Cards:
The next thing to do after considering the Gift Card laws in your region and activating the Gift Card feature in your POS is to create your Gift Cards.
You can create both physical and digital Gift Cards but always keep physical Gift Card on hand for customers who need them.
A recent survey from the Blackhawk Network showed that 42% of customers purchased a physical Gift Card at least every three months.
Depending on the POS system you choose, you can create, print and email digital Gift Cards to customers.
4. Use a Gift Card App:
You can also create your business Gift Card with a Gift Card app which works differently from your POS.
However, the app can independently function on its own from your POS. It allows you to create, sell, track and redeem digital Gift Cards through a dashboard or mobile app.
The Gift Card app can also integrate the POS. For example, Shopify POS allows users to choose some of the following Gift Card apps from the Shopify App Store:
The Gift Card apps make your Gift Card creation and branding very easy and also provide a good user experience for your customers.
You can design, brand and send digital Gift Cards to your customers through email or SMS which they can use both online and in-store.
It is also important to know that the Gift Card apps charge a monthly service fee for their service. Some charge a certain percentage of the total Gift Card sales.
The use of Gift Cards is a very important part of every business. A Gift Card is an effective way of increasing customer base, sales and revenues.
Business owners should tap into the power of Gift Cards, create their Gift Cards and offer their customers as gift options. Businesses that have adopted the use of Gift Cards are likely to grow faster.