At Canadian POS Corporation, our many years of experience have taught us that electronic gift cards encourage repeat business, attract new customers and boost sales all year long. The booming gift card business accounts for billions of dollars per year in sales for retailers all over Canada. And our gift card program is the ideal solution for your business to significantly drive up sales all throughout each year.
Why should you sell gift cards all year round? Here are three reasons:
1. Gift card recipients tend to spend more than the value of their cards. When you sell a gift card in your store, you automatically earn money for items that you haven’t even sold yet. So you’ve already come out on top. However, research shows that when gift card recipients use their cards, they tend to spend more than the value of their cards. That means that you are most likely to generate even greater revenue with each gift card sale.
Karen Deckard of Retail Management Solutions highlights this benefit to merchants. “Gift card recipients overspend their gift cards,” she reveals, “Customers with gift cards buy more than they usually would because it’s like a built in coupon. The best part for you is that it’s a coupon someone else paid for. Most gift card recipients overspend their card balance by at least 20%. Of those that overspend 75% spend 60% more than the card value.”
2. It will improve your cash flow. To reiterate the first point, gift card sales earn you money for items that remain in your store until the gift card recipients visit you to retrieve them. What this means is that you are earning money early. Gift card sales are effectively pre-payments for products that you haven’t yet sold. As a result, you improve cash flow in your store. On SmallBusinessBranding.com, Tommy Jarnac further explains this benefit.
“When someone buys a gift certificate, they are pre-paying you for services that another person will receive later,” he details, “In other words, gift certificate sales really represent cash deposits or full payments for services planned for well in the future, which means 100 percent of the cash is yours to use until the certificate is redeemed.”
3. If gift cards aren’t used is full, they are often redeemed in future. What this means is that your gift card sales are prompting return business. Not everyone overspends their gift cards. For frugal spenders who don’t redeem all of the money on their cards, a return visit to the same store is generally in the plans for the future. Gift cards sales enable you to welcome back recipients to your store many times over.
“Over half the people who receive a gift card come back multiple times to spend the balance,” says Deckard, “This is a built in start to a loyal customer. Not only are you reaching new customers when someone who’s never been to your pharmacy receives a gift card, those new customers have to keep coming back. Take this opportunity to sign them up for your customer loyalty program so that the benefits keep coming.”