7 reasons these real-world merchants use (and love) gift cards

Introduction:

Gift cards are one of the best ways to get started if you want to improve sales, create solid relationships with your customers, generate traffic, and expand your business. They are essential to a company's growth due to how affordable they are to make and the potential money they can bring in. 

By implementing a gift card program, you make it simple for your customers to give gifts. Gift cards can help you grow your business by rewarding repeat customers and promoting your brand.

The most well-known gift card programs are from large major chains. That makes sense because they have some of the most rewarding programs for some of the greatest names in quick service restaurants, retail, and a variety of other industries. They are also extremely well-liked by consumers.

Gift card programs are accessible to small businesses as well, but this fact is less often known. Gift card systems are beneficial to companies of all sizes, from the biggest national chains to one-person shops, and everything in between. Let's discuss the benefits of distributing gift cards within your company in more detail. 

How do gift cards work?

To make purchases at retail stores, gas stations, restaurants, and other places, you can use a gift card as payment. You transfer money onto the gift card, which you or the receiver can use at places that accept it.

There are two types of gift cards: 

• Open-loop 
• Closed-loop. 

A gift card with an open loop can be used anywhere that brand of card is accepted. For instance, you might use a gift card with the Visa logo to make transactions everywhere Visa is accepted.

An open-loop card can be used anywhere, but a closed-loop card can only be used someplace. For example, if you buy a gift card from Starbucks or Amazon, neither you nor the recipient of the gift card can spend it anywhere other than the store that issued it.

1. Increase Sales:

Gift cards increase sales since they are very inexpensive to make and because customers frequently exceed the gift card's spending limit. Because many consumers see the amount on gift cards as "free money," two out of every three customers will purchase 30% more than the gift card's value.

Although holiday sales are the best of the year for merchants, the post-holiday dip can be difficult for them as they struggle to shift their excess inventory. In the slow, post-holiday season, gift cards can encourage customers to return to the store. Customers can use a gift card guilt-free and frequently end up spending slightly more than the gift card's worth, even if they are feeling the pressure of the post-holiday doldrums in their wallets.

2. Increase Traffic:

Gift cards will boost traffic to your store because they are typically distributed to people other than the actual owner. You now have two customers: the individual who purchased the gift card and the receiver.

Gift cards can encourage repeat business by luring customers who otherwise might not have returned or might not have returned as quickly. Every second a customer is at the store is an opportunity for the retailer to attract them to their brand.

3. Point of Sale Authentication:

Gift cards are quite useful since they can be used with your POS system. You can effortlessly watch your customers' behavior by tracking both gift card purchases and normal transactions in one location.

4. Prevents fraud:

Data breaches that have occurred over the past year or so have made individuals more aware of the importance of protecting personal information. Gift cards can help prevent identity fraud because they don't include any and can't be simply copied like paper gift certificates.

5. Boosts Product Awareness:

One of the most affordable ways to improve brand awareness is to offer gift cards. Customers who enjoy your products or services will want to tell their friends and family about their wonderful experiences. Making gift cards available would encourage word-of-mouth marketing, which is one of the most powerful types of advertising.

Although many people make an effort, not everyone purchases gift cards for the purchaser's preferred store. Gift cards can be bought and distributed to treat friends to new experiences, new shops, or new products. 

Gift card marketing offers retailers the chance to attract brand-new customers with predetermined consumer spending. They will have gained much more than the initial value of the gift card if they manage to turn those new customers into loyal ones.

6. Develop a good relationship:

Developing relationships with your customers through the use of gift cards in combination with a loyalty program is a must. You might give them a gift card to settle a dispute, or you could give them one if they spend a particular amount on your products or services.

7. Unused Cards are Extremely Profitable:

• This one is self-explanatory: for whatever reason, gift cards occasionally go unused. If this occurs, your company will only benefit financially.
• Gift cards can assist you in achieving new business objectives, whether they are focused on expanding your customer base, bringing in more money, or boosting customer traffic.
• A recent study found that more than 20% of gift cards expire without being used and that not all lucky receivers of gift cards remember to use them; only 6% of gift cards are ever used. There is nothing better for retailers. 
• Many retailers include an expiration date on gift cards, after which they are no longer required to redeem the cards.
• The Credit Card Act of 2009, which took effect in August 2010, states that expiration dates must be at least 5 years from the date the card is issued, so customers are less likely to experience issues with time limits. 
• Some states completely restrict expiration dates, allowing consumers to use gift cards for an endless period. It doesn't matter whether the gift card has an expiration date, though, if you never remember to take it from your wallet and redeem it.

Conclusion:

Gift cards are as close to cash as you can get without actually handing over cash to customers. They are also convenient, simple to wrap, and simple to deliver. Gift cards provide a wide range of potential purchases for retailers, and each one means extra money in the till at the end of the day.