Gift card programs have garnered over $100 billion in sales from each of the last couple of years. Additionally trends are showing that people who receive gift cards are holding on to them longer, and are less likely to use up the full value in the first month. And once they do bring them in, 61% of gift card holders spend more than the amount on the card.
And since 20% - 50% of purchases made with gift cards are higher than average purchases, it’s a great way to move high end items or sell premium services. Research suggests that users of gift cards are less aware of inflated prices, as well. 56% of gift card users actually want to reload a card after they’ve used it.
Gift Cards - Not Gift Certificates
It is estimated that 10% - 15% of gift cards are never used. 30% of card value is never used! That’s pure profit! All the retailer has to do is buy some ten cent cards and rake in the cash. And consumers are ten times – ten times! – more likely to purchase a gift card over a paper certificate. Paper certificates also require returning cash for the unused portion, whereas gift cards retain value to be used at a later date.
Wal Mart may have close to $1 billion worth of unused gift cards in circulation. Wouldn’t you like to have a even tiny portion of that?
Gift cards are much more efficient for retailers as well. Unwanted gifts are often returned to stores for replacements or for cash. But gift card purchases are rarely returned. Gift cards also smooth out the typical fall in sales after Christmas as users shop in the weeks and months that follow.
Gift cards can be an effective mechanism for attracting new business as well. Undoubtedly people give cards from stores that recipients have never been to before. And once they go in, its your chance to shine and show how great your products or services are.
If you already offer a membership card or loyalty card of some sort, then incorporating a gift card into the mix shouldn't be too difficult. Even if you are starting from scratch, the costs are minimal.
Get your gift card program started today!
Card Guru
