Gift cards are a popular present idea for shoppers who don’t know what to buy. Over 90% of American shoppers have exchanged gift cards at some point. In turn, global gift card sales are expected to reach $2.7 trillion by 2027.
If you want a slice of these growing revenues, you need to start selling gift cards.
As a leading payment processing company, we’ve seen first-hand at Electronic Merchant Systems (EMS) how powerful gift cards can be for small businesses. Not only can they increase your revenues, but they can build your customer loyalty and bolster your brand recognition.
Still on the fence? Below, we’ll break down nine reasons to use gift cards at your business.
Table of Contents
- #1 Gift Cards Can Help You Attract More Customers
- #2 Gift Cards Promote Bigger Purchases
- #3 Gift Cards Can Boost Your Brand Recognition
- #4 Gift Cards Help You Compete During the Holidays
- #5 Gift Cards Can Reduce Returns
- #6 Gift Cards Can Decrease Fraud
- #7 Some Gift Cards Are Pure Profit
- #8 Gift Cards Can Help You Build Relationships
- #9 Gift Cards Are Easy to Integrate Into Your Business
- Next Actions
T#1 Gift Cards Can Help You Attract More Customers
As a small business owner, you probably employ several strategies to attract new customers, from distributing flyers to marketing on social media. However, an easier way to attract new customers is to sell gift cards.
For every gift card sale you make, you acquire two customers—the person who purchased the gift card and the gift card recipient.
In 2019, 90% of shoppers who received gift cards to small businesses they had never visited before said they would shop there again. As a result, selling gift cards is a great way to reach new customers. If these shoppers love your products or services, they may end up becoming loyal customers down the line.
#2 Gift Cards Promote Bigger Purchases
Gift cards can also increase your revenues by inspiring larger purchases. The reason? Since most gift card recipients view their gift card as “free money” or a hefty discount, they’re often willing to spend more at your store than they would otherwise.
Just take a look at these gift card statistics:
- 72% of gift card shoppers spend more than their gift card’s value
- 25% of gift card shoppers buy items they weren’t planning on purchasing
- 8% of gift card shoppers buy higher-priced versions of the items they intended to buy
As you can see, offering gift cards can supercharge your sales in more ways than one. While your gift card recipients enjoy perceived discounts, you enjoy increased revenues.
#3 Gift Cards Can Boost Your Brand Recognition
Brand recognition is the degree of familiarity people have with your business. If you want to bolster your brand awareness, gift cards can help.
Your gift cards can serve as miniature billboards for your business as they’re exchanged from person to person. You just need to customize their design with your branding and logo.
Personalizing your gift cards is easy when you select the right gift card vendor.
Over 70% of shoppers say they’re more likely to purchase from brands they’ve already heard of, so boosting your brand awareness can translate to even more sales in the future.
#4 Gift Cards Help You Compete During the Holidays
Sometimes, finding the perfect gift for a loved one can be tough. Many people rely on gift cards to ensure their loved ones receive something they truly want. With that in mind, it’s no surprise that over 70% of people purchase at least one gift card during the holidays.
If you want to capture these holiday sales, you need to offer gift cards.
Otherwise, you may lose a lot of money to the large chain stores that already have comprehensive gift card programs in place.
#5 Gift Cards Can Reduce Returns
Accepting returns can be costly for your business. Managing returns is also labor-intensive and time-consuming. Luckily, gift cards can streamline your return process in the following ways:
- They reduce the number of gift returns – Gift cards enable gift recipients to purchase the items they really want from your business, whether that’s their favorite scented candle or a new blouse that fits just right. In turn, offering gift cards can reduce your total number of returns.
- They provide a win-win solution for returns without receipts or late returns – Granting returns to people who don’t have their receipts can be risky for a small business. However, denying returns may upset some customers. A mutually-beneficial solution is to offer gift cards to people who try to return items without a receipt or after your stated return period. This way, the customer can get the value of their item back, and you can keep the revenue in your business.
- They may mitigate theft – Sometimes, people steal items and attempt to “return” them for cash. By utilizing gift cards in your return policy, you may be able to decrease the prevalence of this type of theft. Simply update your return policies to state that customers can only receive gift cards instead of cash.
#6 Gift Cards Can Decrease Fraud
In the past, small businesses offered paper gift certificates in place of plastic gift cards.
While paper gift certificates fulfill a similar function as gift cards, they’re much more prone to fraud.
#7 Some Gift Cards Are Pure Profit
The primary goal of offering gift cards is to get more people in your store, but having a gift card go unused can be beneficial too. It’s estimated that 6% of gift cards are never redeemed.
This situation is still a win for your revenues. After all, unused gift cards are pure profit for your business—you don’t need to exchange any inventory or service hours for them.
#8 Gift Cards Can Help You Build Relationships
According to the Pareto Principle, 20% of your customers are responsible for 80% of your sales. Nurturing the relationships you have with these loyal customers can benefit your business even more than attracting new ones.
One effective way to extract repeat business from your most loyal customers is to set up a loyalty program that’s tied to your gift cards. For instance, you can give gift cards to customers once they reach a certain number of loyalty points.
You can also give customers gift cards to settle any disappointments or disputes.
For example, maybe you own a restaurant and the service was slow for a pair of regular customers. Rather than leaving a bad taste in their mouth and potentially losing their business, you could offer them a gift card to express your apologies and ensure they come back again.
#9 Gift Cards Are Easy to Integrate Into Your Business
Chances are, you already accept credit cards and debit cards at your business.
If you have a compatible point of sale (POS) system, accepting gift cards is just as easy and convenient.
Ready to Launch Gift Cards for Your Business?
As you can see, gift cards can provide small businesses with many advantages, such as higher revenues and stronger customer relationships. If you want to take advantage of all that gift cards have to offer, EMS can help. We can provide you with beautiful, custom-branded gift cards when you enroll in our Gift & Loyalty Card Program.
So, why choose EMS? Since 1988, we’ve been offering exceptional payment processing services. We’re also known for our reliable customer support—we can assist you any time, any day of the week. Most notably, 95% of our customers experience significant savings after implementing our customized payment solutions.
Are you ready to get your gift card program underway? Find out which EMS payment program is right for your business today.
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