Leverage Gift Cards to Grow Your Business
It seems that big box retailers and national chain restaurants have figured out that branded gift cards are a valuable tool to increase revenue and overall profitability. Yet it appears that small businesses have missed the mark on implementing a gift card program into their business plan. To the business owner that is already wearing too many hats, a gift card program seems like a luxury that he or she has neither the time or the resources to implement.
Host Merchant Services has the perfect solution for a merchant in this situation and mindset. We have the ability to implement gift cards and/or loyalty cards in a turn-key manner that will increase profits without adding more headaches. HMS can cover everything from setting up your terminal to swipe gift cards to designing the look and feel of the actual cards.
A recent research study by the National Retail Federation shined light on some pretty interesting statistics about active gift card and loyalty card programs. On average, recipients of gift cards spend $29 over the purchased value of the card. In addition, 61% of gift card holders spend more than the original amount on the card. The consumer rationale behind this is that if they received a gift card for $50 and the item they want to purchase is $75, that is only a difference of $25 out of pocket. This added value encourages extra spending that might not happen without the catalyst of gift cards. This value also helps to diminish buyer’s remorse and in turn reduce chargebacks and returns.
With a benchmark of only around 10% of small business currently offering a gift card option to customers, there are many merchants that are missing out on expanded revenue. We suggest purchasing a gift card program several months before holiday season in order to leave time for business owners to implement a system. This will allow for setup and installation, training of staff, and promoting awareness campaigns so that your customers think of your business first when the holidays roll around.
Loyalty cards are also a powerful way to create “stickiness” with your customers to ensure repeat business and a steadier flow of revenue. Host Merchant Services has numerous solutions and can help you retain and maximize the business potential from your current customers. Coupled with a strong gift card program that can help you capture new customers, the one-two punch of gift and loyalty programs can have an incredible impact on your business with no hassle or headaches!
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