In a word...yes. There’s no arguing the fact that customers love buying and using gift cards. Every year Canadians spend $6 billon on these cards and more than half of Canadians surveyed said that they purchased or received a gift card in the past year. Clearly gift cards are popular with customers, but did you know that gift cards are good for your business too?
The gift that keeps on giving...to you
It doesn’t matter what the dollar value is on their gift card, chances are that customers with a gift card will spend more. According to a study by Moneris® in 2013, over 40% of consumers who received gift cards spent more than the face value. In fact, they overspent by an average of 33%! Furthermore, Starbucks CEO Howard Schultz noted that gift cards given to non-Starbucks customers during the last holiday season, became one of the most important business drivers. That meant that new members of their loyalty program contributed not only short-term increases in revenue and profit, but also long-term loyalty for years to come.
Have we met?
Offering gift cards is a great way to attract new business. The card will bring new customers into your store and they will be coming in with the sole purpose of making a purchase. The best part is that while your current customer base will be purchasing the cards, they may be given to friends and family who may have never been in your store or shopped with you online before.
Keep your business top-of-mind
Gift cards can be branded with your company logo as a reminder to the recipient that they need to visit your store. Moneris has a Gift Card Program that allows you to offer cards in any denomination, customized with your logo and brand message.
There is going to be a time gap between when a gift card is purchased and when it is redeemed. That gap can be days, months or even longer and all the while the money used to purchase the card will be earning interest for you.
What makes a good gift card?
If you are going to offer gift cards for your business, you might as well follow some of these best practices designed to keep customers happy:
- No activation, maintenance or other fees
- No expiry date
- Redeemable at all of your locations and online
- Decreasing balance so the customer can use it more than once
- Replacement for lost or stolen cards
Gift cards…the gift that keeps on giving
Whether it’s to attract new customers, take advantage of the 33% customer overspend with gift cards or simply to take advantage of their increased popularity, you can only benefit from including gift cards as part of your small business’s offerings.
This article is for informational purposes only and it is not intended to provide you with any personalized financial, marketing, accounting or tax advice. Neither Moneris Solutions Corporation (Moneris) nor any of its affiliates shall be liable for any direct, indirect, incidental, consequential or punitive damages arising out of use of any of the information contained in this article. Neither Moneris nor any of its affiliates warrant or make any representation regarding the use or the results of the use of the information, content and materials contained in this article in terms of their correctness, accuracy, reliability or otherwise.