17 Oct When it Makes Sense to Offer Gift Cards
Many businesses are hesitant to offer gift cards simply because they’ve never done so before. Most are very concerned that they will run into problems or that the cards will be too complicated to figure out. The truth is that just like learning about payment processing and merchant accounts, adding gift cards takes just a small amount of research, and it can increase profits substantially in exchange for a small investment.
Many businesses have the problem of customers coming in to buy a gift for a friend or relative, then realizing that they can’t decide what to get. Clothing shops run into the issue of not knowing the recipient’s size, while other stores might not know the right color of an item to recommend. Because so few customers are willing to return a gift that doesn’t work out, these customers end up walking out of the store.Service based businesses have a different problem. People who are hard to shop for are often the perfect recipients for a service-based gift. For example, if you don’t know what to get for Mom, you know she’ll always appreciate a day at the hair salon or spa. If a relative lives far away or schedules just aren’t similar, however, it can be hard to schedule a time, much less convince a relative to let the gifter pay.
With gift cards, however, both of these situations are fixed. A customer can buy a gift card and allow the gift recipient to pick the perfect size, color, and/or time for their gift. Furthermore, it’s almost always the case the customer will buy a gift card in an amount larger than what the gift they were considering would actually cost. This means that the business has the chance to make an additional sale when the recipient comes in to use the card.
Gift cards are also great ways to get new customers into a business. When an established customer purchases a gift card for a friend or relative, they’re essentially creating a new customer for the business. Many people have tried a new product or service simply because they do not want a gift card to go to waste. When a business considers how many of those customers will make a second purchase simply to use up the remaining balance on the card or pass the card on to a third friend or relative, it’s easy to see how gift cards can help a business to expand their customer base.