Because they are usually called “gift cards,” it’s easy to think that their main function is to be sold and given as gifts, like the gift certificates that preceded them. But gift cards are really better described as stored-value cards, and thinking of them as such will make other uses for them clearer.
The most common alternative use of stored-value cards is for returned merchandise. If you balk at giving cash refunds, and low inventory makes exchanges problematic, provide the customer store credit in the form of a stored-value card.
Another use is in promotions, as an alternative to the “10 percent off” coupon or sale. Instead of discounting merchandise, offer a gift card worth 10 percent of a customer’s sale when some minimum amount is spent. The customer gets a deal, and you get a return visit. The returning customer is likely to spend more than the value of the card.
Some retailers even tie gift cards into direct mail promotions by mailing cards to a list of select customers. The cards have no value until the customer comes in to activate them.
When a customer presents the card you mailed them, it can be “loaded” with a value based on the amount they spend or can be like a lottery ticket, worth $1, $5 or $10 by random chance. Natural curiosity will get people in the door.
Put a time limit on the activation of these promotional cards to drive business to your store in an otherwise slow period.
These few ideas have been successful, but as a creative retailer, you can think of other ways to use the cards, especially if you think of them as stored-value cards rather than simply gift cards.
Gift cards are rapidly gaining in popularity, and recent data confirms the argument that they can only benefit retailers who use them.
• On average, consumers spend 20 percent more than the card’s value.
• 61 percent of recipients spend more than the gift card’s value.
• 10 percent of gift card holders do not redeem their cards.
• Gift cards generate 15 percent to 46 percent more sales than gift certificates. *
For information about MRA’s electronic gift card program, contact your marketing representative or call 800.366.3699.
*Source: Credit Card Management