How To Implement A Gift Card Program For Small Business: Part 1October 2020
Gift cards have long moved past being a simple craze or gimmick. They have become a hugely effective way to increase profits and, in some cases, are a nearly essential option for businesses to offer.
(Take it from someone whose friend requested gift cards last Christmas and, when asked to be more specific, replied, “I don’t care from where. I just like gift cards.”)
This is why virtually any point of sale company that’s worth its salt either offers gift card functionality or integrates seamlessly with a gift card company, such as Cards Plus
It is a low-cost (or sometimes no-cost) way for businesses to bump sales, increase brand awareness, and encourage repeat business. But if you’re a small business owner who’s already putting in 80 hours a week just trying to keep your head above water, the thought of adding gift card functionality might seem complicated or time-consuming.
In this post, we’ll try and assuage some of those fears and explain the different types of gift cards available and how you might go about offering this feature to your customers.
The Benefits Of Offering Gift Cards
First, let’s briefly talk about the benefits of adding gift cards to your small business.
- Branding: In this day and age, anything that gets your name or your logo out to the public is a plus for your business. You can sell your merchandise and send customers out the door with personalized shopping bags, and your own unique gift card can have the same effect.
- Spending Boosts: Studies have shown that the majority of gift cards users spend more than the total on their card. South African consumers paying with gift cards spend an average of R250 more than the value of their gift card. The confidence of knowing that at least part of their purchase is already covered can potentially spur the customer to buy more than he or she had originally intended. On top of that, gift cards have already been purchased, so if it goes unused or there is a small balance left on the card, you still get that profit.
- Repeat Business: Once you’ve set up gift cards, it makes it easy to run marketing or promotions to attract new customers or encourage repeat business. Having someone who purchases a gift card and gives it to a friend or family member who may not have previously been inclined to visit your store is a big bonus. However, you can also tack on promotions that, for example, give the purchaser a small gift card as a bonus for purchasing a gift card of a certain amount.
- Ease: Setting up or purchasing gift cards is generally a straightforward process whether you’re going directly through your POS system or a processing company, which Cards Plus will be able to recommend for you. It can be as quick and painless as clicking a few buttons to activate electronic gift cards, or you can order physical cards, providing your design and company name. Cards Plus offers a variety of different designs and specs that you are able to choose from. For more information on this offering click here
The 3 Types Of Gift Cards You Can Offer Customers
So now, let’s give you a few examples of the types of gift cards you can purchase to see what might be the best fit for your business.
1. Barcode Gift Cards
If you want to set up physical gift cards, you will likely have one of two options. If you get gift cards with barcodes, it will act as a unique account for the customer that uses it. You can store and search a customer’s information via their account. When the gift card’s balance hits zero, there is usually the option to reload it. Of course, you will need a barcode scanner to look up gift cards.
2. Magnetic-Stripe Gift Cards
More often than not, physical gift cards use magnetic stripes, as they have superior data security compared to barcodes. These reloadable cards swipe through your credit card terminal the same as any debit or credit card, and the amount gets automatically deducted from the customer’s account information stored on the stripe. Magnetic-stripe gift cards are the easiest and most secure way for most brick-and-mortar businesses to accept physical gift cards.
3. Electronic Gift Cards
In many respects, this is the easiest way to utilize gift card functionality. Electronic/digital/”eGift” cards give customers the ability to purchase gift cards online, which can be sent to a friend or used by the customer on your website or in your store.
Some electronic gift cards may just have a numerical code that you can redeem from your terminal, like a regular credit card transaction. Other programs may have a regular barcode or a QR code (2D barcode) that your business’s POS system can scan from the customer’s phone or printout. You lose some of the benefits of branding by not having physical cards in your storefront, but you can’t beat the convenience — or the affordability. While eGift cards have no production cost, traditional gift cards are very affordable too.
For more information on the price of traditional gift cards, contact Cards Plus on + 27 11 894 3914