Gift cards aren’t just something for the holiday season. Year round, gift cards can be the best marketing tool and sales driver in your business. I could write something catchy here, attempting to grab your attention, but in truth, the proof is in the proverbial pudding (or numbers) so let’s get right down to brass tacks, shall we?
% of gift cards that go unredeemed?
Average value of gift cards?
Average # of gift cards sold per year?
Average amount of checks paid with gift cards?
30% (Consumer Reports)
$40 (Flyght Portfolio)
400 (Flyght Portfolio)
$48 (CBS News)
And now, to the mathing!
400 cards per year x $40 (average) x 30% (unredeemed) = $4,800
$8 (amount spent above gift card value) x 280 (70% of cards that are redeemed) = $2,240
Over $7,000 in actual profit can be realized through the use of gift cards in an average retail or restaurant business, and we haven’t even gotten to the part where gift card users are more likely to return to your business than non-gift card users.
Of course, just knowing that gift cards are great doesn’t get them out the door. What can a business do to sell more gift cards?
- Get gift cards on your menu (restaurant) or at the pay counter (retail). Promote your cards where your customers make their purchases.
- Sell gift cards on your website. Currently, less than 5% of independent retailers sell gift cards online, and with online ordering, paypal, etc, selling a gift card online has never been easier.
- Use gift cards to reward great customers or placate unhappy ones. If you’ve ever comp’ed a dessert for a great guest or for a bad experience, you may be leaving money on the table. Instead of reducing a bill, give a gift card in a commensurate denomination. This will encourage a return visit, and the customer will most likely spend far over and above the $7 gift card for the free dessert.
Finally, a note on when to expect a return on your investment – it takes two to three weeks to design, print and ship new gift cards. Including that time, expect to see a sales jump within 90 days of joining the gift card party.