Unwrapping the 5 Biggest Business Benefits of Gift Cards
With the holiday season fast approaching, and business owners preparing to maximise their profitability in the coming weeks and months. Gift card retailing has become an increasingly important strategic tool in achieving this objective right across the retail and hospitality sectors. According to LoyLap data, businesses could make as much as 80% of their annual gift cards sales in November and December alone.
Additionally, the global gift card market continues to grow and is forecasted to double in value by 2027, with digital gift cards currently making up 11% of the market expected to grow at more than twice the rate of the market as a whole. This is great news for business owners given that gift cards provide significant additional benefits at a time when they are most needed.
In terms of marketing, a successful gift card strategy can be simple to execute with minimal cost and effort and can continue to deliver long after the holiday season is over. Successful gift card implementation by business owners can deliver significant and measurable benefits.
1. Improved cash flow
Improved cash flow is the first very obvious benefit of gift cards to businesses. Gift card sales are ideal to secure some additional liquidity which is great, particularly for the upcoming festive season where your resources might be stretched with money tied up in stock, extra staffing costs, marketing, logistics costs and more.
2. Higher revenue and increased sales
A study by First Data showed that not only does the average redemption sale exceed the value of the gift card by an average of $59 dollars. According to the same survey, this overspending is most profound when the gift cards were purchased for dining, fast-casual restaurants and drug stores. And in many cases, the full redemption of the balance on the gift card is completed over multiple visits to the store.
Additionally, most gift voucher sellers gain the residual benefit of many cards that for one reason or another, are never redeemed against a purchase.
3. New customer acquisition
Gift vouchers can play an important role in new customer acquisition, with opportunities created with every gift card sold that your business could be introduced to a new customer via a friend or family member.
4. Improved stock clearance
Another benefit that may not initially strike business owners is that gift cards can actually help with stock clearance since most gift cards are redeemed in the immediate post-holiday period, they enable vital stock reduction during the post-holiday period sales.
5. Repeatable success
Once gift cards your gift card program has been set up and integrated into your offering, there is minimal maintenance required, and your gift cards have an infinite shelf-life. They can be purchased all year round for birthdays, anniversaries, weddings and other celebrations as well as and offering a promotional opportunity for other holidays such as Mother’s Day and Valentine’s Day.
Gift cards give businesses the opportunity to ensure that they maximise their share of wallet from existing customers while opening an avenue for new customer acquisition. From a branding perspective, strong bespoke packaging and card design offer a great platform to reinforce your brand to both parties involved in the exchange of gifts. The ritual of gift-giving is brimming with positive, endorphin-fuelled emotions and there are very few opportunities to connect with your customers in such a profound way.