Does your small business have a gift card program? If not, you could be missing out on a viable opportunity to increase sales and build your business. With the holiday shopping season right around the corner, now is the time to explore gift card programs and consider creating one for your business.
Gift cards are more popular than ever
According to industry statistics, over $100 billion is spent annually on plastic and digital gift cards, with 93% of U.S. consumers purchasing or receiving a gift card annually. Additionally, 72% of customers will spend an average of 20% more than the value of their card. Gift cards are particularly popular among Millennials, who enjoy the ease and convenience of buying and giving them. The most popular gift cards by category are restaurants, department stores, prepaid cards from major credit card issuers that can be used virtually everywhere, coffee shops, and entertainment such as movies and music.
It makes sense, then, to consider creating a gift card program to help grow your business. Gift cards can strengthen relationships with existing customers who buy your cards, and bring in new business from people who receive your cards as gifts, some of whom will likely be visiting your business for the first time when they redeem them.
And don’t forget that your employees love gift cards, too. They’re a great way to reward your associates who meet sales goals, supply referrals, or simply do a great job.
Gift card program options
There are two main kinds of gift card programs:
- Closed Loop – Gift cards can only be used at your business; these programs are generally available through your merchant bank or you can contract with a third-party vendor.
- Open Loop – Gift cards are not tied to a particular business and are accepted almost everywhere. Major credit card issuers such as Visa, MasterCard, Discover and American Express provide open loop gift cards which are redeemable on their networks anywhere their credit cards are accepted.
Each type of program has different features and benefits that may or may not be the best fit for your business. Take the time to carefully consider and understand all the options available before you commit to a card program.
What are digital gift cards and how do they work?
Another popular gift card option isn’t actually a card. Electronic or digital gift cards can be purchased by your customers on your company’s web site or at your location and sent to recipients via e-mail or text message. The e-gift card appears as a bar code on the recipient’s phone that the merchant scans with their payment processing system.
How can I start a gift card program for my business?
If you have a merchant services relationship with a bank, talk with your merchant services sales specialist about gift card programs that may be available through the bank’s merchant program. For instance, Hancock and Whitney Bank merchant services customers who use the Clover® payment processing system can take advantage of Clover Gift Cards, an easy-to-use card program that can be up and running in a short time. The Clover system also integrates with the popular Gyft smartphone app for digital gift cards.
Keep in mind, though, that if you want to set up a gift card program using traditional plastic cards in time for this year’s holiday shopping season, you need to allow time for your cards to be produced and shipped to your place of business. Typical production time for plastic cards can be up to 8 to 10 weeks, depending on your gift card program provider.
You can’t afford not to have a gift card program
Regardless of the kind of gift card program you select, experts agree that your bottom line will likely benefit from the business-building power of a gift card program. Gift cards are an affordable way to increase customer loyalty and generate new business. Our merchant services sales specialists are ready to help you learn more about the various program options and start your card program today.
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