The stats continue to astonish: An estimated $150 billion spent on gift cards in 2017. Over 90% of consumers will buy or receive one this year and more than 70% of shoppers with a gift card spend over the value on the card. In addition, digital gift cards are growing at roughly a 200% annual pace. We could go on and on with these staggering statistics…
With all the options that are available to consumers - both online and offline - merchants need to do everything they can to earn the savvy consumer’s business. Whether you want to keep existing customers loyal, turn first-time customers into long-term customers or find new shoppers, gift card programs can be a powerful tool to make this happen.
Many businesses hesitate, thinking that their model doesn’t lend itself well to a gift card program, but in doing so they may be forfeiting a simple, steady revenue stream. Here are a few ways that gift cards benefit a retailer of any kind:
Once you sell a gift card, the customer must use that money at your store. And over 90% do within 60 days of receiving the gift card. But most customers will spend more than just the card’s balance—customers on average spend 20% more than the value of the gift card.
When someone recommends a new store or restaurant, you may listen, but you aren’t certain to visit. A gift card, though, is a recommendation with an obligation attached. If a new customer receives a gift card, they’re nearly certain to visit.
Every time a card holder glances at their wallet and sees your logo or your custom card design, they’ll be reminded of you. Gift cards become effective billboards for your business. Eventually, when the time comes that they need an item, they’ll think of your store first.
It’s a holiday or birthday and you’re down to the last minute and need a gift, so you choose a gift card. If a customer comes in on the hunt for gift cards and you don’t have them, you’ve instantly lost revenue and the opportunity for a new customer.
The Optics are Powerful
Even if you don’t have frequent requests, the mere act of displaying gift cards has been shown to boost gift card purchases. Gift cards on your counter help “legitimize” your business and assist you to effectively compete with larger businesses.
On average, customers visit a store twice to use their balance on a gift card, and a customer that has already come to your store multiple times is very likely to return.
With all the benefits of gift cards there’s one more important point to consider: many customers simply will not use the card. While that card sale may not have resulted in a new customer, depending on state law, you may have made money without having to sell inventory.
Are Gift Cards Right for You?
OpenEdge is happy to help you find out. Depending on your specific OpenEdge software integration, we may have a solution available to you. Your OpenEdge representative can offer more details. You can call us at 800.774.6462, option 1 to learn more.