Gift cards have proven to be very lucrative for businesses. There are several advantages to selling gift cards at your company and that would explain why they have surged in popularity in recent years. For example, many gift cards go unused, effectively letting these businesses profit from selling nothing but a piece of plastic. Moreover, the money spent on gift cards is immediately deposited into a company’s bank account, accruing interest until the value on the card is spent in the store. This is “free” revenue.
Further still, when (and if) the gift card is used, the customer typically makes a purchase of greater value than that on the card. For instance, Ticketmaster has started selling gift cards for as little as $25. You’d be hard-pressed to find an event ticket for less than that amount and even if you did, you would receive a refund for the difference.
The point of this post isn’t necessarily to point out how lucrative the gift card market has become for businesses — clothing stores, electronics shops, etc. — but the point is rather to indicate that clever marketing that has come behind the very concept of a gift card. The industry has convinced consumers that gift cards offer options and convenience to the recipients. They’ve told us how the best Christmas present could be a gift card. All the while, however, they’ve been enjoying the “free” added revenue. This further demonstrates the saying that perception is reality.
Design your marketing efforts to encourage further sales. As I said, people will spend more on their purchase than the value of the gift card. The same can be said about coupons you may distribute that, for example, offer a discount if the total bill exceeds a certain amount. This gets people to spend more just to take advantage of the deal and this money that they may not have spent otherwise.