By Logan Hickle
For The Cordova Times
Do you offer gift cards to your customers? If not, this may be the season to start.
Consumers are expected to spend an average of $1,000 on holiday gifts this year, and most of the people shopping aren’t hoping for traditional presents. The National Retail Federation (NRF) reports that 56% of consumers would prefer to receive gift cards in their stockings. They’re on more holiday wish lists than electronics, clothing, or jewelry.
For some companies, the timing couldn’t be better. Supply chain shortages have made it harder to acquire some items from large retailers this holiday season, so more shoppers are turning to smaller local businesses to pick up their presents.
As a small business owner, you could end up seeing a larger share of the customer market as a result. If that happens, you want to have as many options as possible available to your shoppers, which this year should include gift cards.
The research surrounding gift cards points to many advantages for your business and its bottom line.
- A gift card is the only category of gift that grew year-over-year from 2020 according to the NRF’s survey. Also, from 2018 through the second quarter of 2020, the average number of gift cards purchased per quarter rose sharply, jumping from 2.6 to 4.7.
- Multiple reports also illustrate that those who buy items with gift cards often spend more in your store than the value of the gift card. This is an enormous advantage for your business. You already made the sale once, but now your brand is in front of two sets of eyes, and you’ve made a larger sale.
- Your small business gets all the money up front without having to immediately hand out inventory. This scenario is especially helpful if you are experiencing supply chain shortages and delays. The sale is secure with the promise of inventory on a later date.
- Physical gift cards are a great tool for upselling during the holidays, but digital gift cards are becoming equally as important. Universal access from any device means the gift-giver does not have to physically be in your store to purchase. Especially if you have a strong and vocal customer base, shoppers know what brands their loved ones enjoy and can delight from afar.
So, how do I set up a gift card program for my business? When it comes to setting up gift cards for your business, the process can be involved. The short answer is that your options heavily depend on the POS system you’re currently utilizing. Popular options include Square, Shopify, Revel, Toast, Quickbooks, Lightspeed, and others.
Better Business Bureaus lists a few things to consider when thinking about setting up a gift card program:
- If from a third party, does this service integrate with your current POS system?
- Is there a monthly fee involved?
- What are the transaction costs for the gift card program (i.e., do you pay for the cards up front and pay a transaction fee at the time of customer purchase of the gift card?)?
- Does the service offer both physical and digital gift cards?
- Can you set an expiration on the gift cards (and do you want to set an expiration)?
- Can you put custom branding on the physical gift cards?
Research your options to set yourself up for success.Logan Hickle writes for Better Business Bureau Great West + Pacific.