Last week, we blogged about the fact that January is “Gift Card Redemption Season”. Allow us to reiterate this slightly-updated statement: “Gift Card Redemption Season” begins in January…and carries on throughout the rest of the year. February is certainly no exception. Not only is it a month when gift cards received during the holiday season continue to be redeemed, but it’s a month when gift card purchases increase.
Good old Valentine’s Day is on the way! And you better believe that gift cards are widely accepted as Valentine’s Day gifts. If you’re not yet one who is selling gift cards in his/her store, there’s no better time than now to change your mind.
Here are three reasons to get in on the gift card selling business:
1. Gift card recipients will end up purchasing more than the value of their cards.
This has become a well-known fact among Canadian retailers. And it’s one that we’ve pointed out many times before. Because the majority of a gift card recipient’s purchase is “free”, he/she generally has no problem paying a little extra to get what he/she really desires.
“By selling gift cards, you don’t just increase sales, but you earn more money per sale,” says Vaucher.com, “And that’s because, statistically, gift card recipients end up spending more money than the face value of their cards. According to GiftCards.com, 72% of customers will spend more than the value of their cards. In fact, on average, they spend 20 percent more!”
2. Gift cards allow you to get paid for nothing.
To be more specific, each sale of a gift card ensures that you earn money for not having yet released any of your items. In other words, you’re being paid in advance. In many cases, you will hold on to that money for months before the gift card is even redeemed. And, in some other cases, the gift card doesn’t get redeemed at all. That’s literally being paid for nothing!
“When a gift card is purchased or reloaded, you keep the cash until the card is redeemed,” explains Vantiv.com, “This is money that can be used for payroll, to stock inventory, or take care of other operating expenses. And, depending on the laws of your state, you may be able to keep the earnings on cards that are not redeemed.”
3. Gift cards are perfect ways to get referrals.
There’s no better type of promotion than word-of-mouth promotion. This is yet another truth understood by Canadian business owners everywhere. And what could be a better way to receive a referral than to have someone pass along a gift card from your store? Gift cards are literal expressions of “try this store out!” Making them available to your customer base is bound to introduce you to new customers.
“The more you sell, the more ‘recommendations’ you know are out there,” points out Vaucher.com, “Selling gift cards in your store is a surefire way to get more customers coming through its doors. Remember, as well, that each time a person uses a gift card in your store, it provides you with an opportunity to spark a new customer relationship that can last a long time.”