Gift Card, Gift of the Year Again
Let’s face it, we all love gift cards. It is no surprise that a recent NRF study found that gift cards are at the top of our wish lists again this season. We love gift cards for making our shopping lives easier, now there is always something to buy for the one who has everything. We love receiving gift cards and the promise of getting exactly what we wanted instead of another unfortunate sweater from Aunt Linda! And as retailers we love gift cards and what they do for our bottom line! The fact is that gift cards are good for business. They have a proven track record for increasing store traffic, bringing buying customers into stores during the historically slow post holiday shopping season, and resulting in sales greater then the value of the gift card itself.
Have you joined the gift card craze? Considering that gift card spending is expected to top $24.78 billion this year, it may be worth looking into! I recently read that gift cards outsell paper gift certificates by 35%, and that customers using gift cards vs. paper certificates spend on average 40% more than the value of the card with the majority of holiday gift card redemption taking place in the month of January. Studies have also shown that gift card sales increase by 84% when sold with individual wrapping and/or gift card holders. An 84% increase is a lot!
I have been considering these statistics and why plastic dominates paper so significantly, and I think it comes down to customer experience.
Plastic cards offer a more convenient, flexible and personal experience then paper certificates are able to. Gift cards are made to fit in your wallet and as such come with instant familiarity and built in convenience. While paper certificates are typically wonderfully branded but oversized and awkward to keep handy resulting in a comparatively negative customer experience.
Certificates often present a cumbersome experience for the customer by requiring them to use the full amount on a single purchase. This often results in the customer wandering aimlessly around your store looking for a small item to get them just over the necessary amount, something many shoppers are no longer accustomed to and don’t always appreciate. In comparison, gift cards can carry a balance allowing customers to use the full amount all at once or over the course of multiple visits to your store, some cards are even reloadable, a brilliant feature for any retailer looking for ways to keep their brand in the customers wallet and top of mind.
There are many benefits to offering your customers gift cards as the numbers and statistics indicate. But whether you are offering gift cards or paper certificates this holiday season, be sure to maximize your opportunity by advertising them clearly at your point of sale and throughout your store, and don’t forget the importance of packaging it could make a difference of 84%!
Canadian Retail Solutions Inc. (CRS) specializes in Inventory Control and Point of Sale Systems for retailers across Canada. Our business philosophy reflects an unwavering dedication to quality, integrity and personalized client support in all we do.
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