Gift Cards – Your Business Has Them, Right?!

Gift Cards!

If you have a business and don’t have gift cards yet, then you are missing out BIG TIME.  With the Christmas season around the corner, merchants and consumers are busily preparing for the shopping rush.  Whether you’re thinking about keeping your shelves stocked with the newest and hottest products or ensuring your kitchen staff is ready to take on the back-to-back Christmas office parties you have booked, one thing you shouldn’t forget about are gift cards.  If you’re not already offering them, here’s why you should give them serious consideration this year.

Gift Card Statistics

Statistics show that year over year, giftcard sales continue to grow.  They are the favoured gift among the teen and pre-teen demographic and those “who are hard to shop for”. And in order to accommodate this increasing demand, merchants have moved away from the antiquated paper gift certificates to the electronic gift card version.

Why Gift Cards Are Popular

There are several reasons why giftcards are popular with merchants.  Research show that a large percentage of consumers will typically spend more than the amount that is loaded on the giftcard, sometimes up to double the amount.  The uplift in the transaction makes gift cards very attractive.  And while there is that percentage of those who spend more, there is also a percentage of consumers who will leave a small amount on the card that is never spent or never even bother redeeming the card.

Gift cards hold no value until the amount is loaded at the point of sale.  And with the gift card designs now at an all time creative high, merchants can use these cards as additional marketing tools that can be prominently displayed throughout the store.

Gift cards have several advantages over their paper gift certificate cousins.  Because they are electronic, they are difficult to counterfeit.  Also, merchants have the option of setting preloaded denominations or choose to load the denomination at the point of sale.  Information is captured through the point of sale terminal and as such, electronic reporting is available for merchants to track their gift card sales.  Lost and stolen gift cards can also be reported and deactivated at the point of sale.

Other Ways to Leverage Gift Cards

Gift card can also be used as a merchandise return mechanism.  Instead of providing a cash refund for a return, merchants can provide a store credit placed on a gift card which will ensure repeat traffic to the store.

Gift Cards Not Just for Christmas

While the Christmas season is the high time for purchasing gift cards, studies show that those stores with gift cards sales show also strong numbers into January and February… when the redemption of the cards will typically happen.

How to Get Set-up With Gift Cards

Acquirers have recognized the popularity of these electronic gift cards and as such, have made great strides to ensure that even their smaller merchants have the option to offer gift cards.  Gift card packages now range from completely customized cards with full card design, inter-store redemption and tracking of sales to off the shelf products with default designs and preset amounts.  Check with your acquirer to see what packages are available for you.

One item to be aware of is that different provinces now have different laws that disallow expiry dates or transaction fees on gift card purchases.  Be sure to check with your provincial laws before setting your gift card guidelines.

With the growing popularity of gift cards, can you afford to not offer gift cards your store?

Apply for a Gift Card Program here.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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