How Gift Cards and Gift Certificates Increase Profits

Retail sales figures for gift cards and gift certificates continue to increase at double-digit rates, and the upward trend is likely to continue.

Not only have gift cards and gift certificates been increasing in popularity because consumers like them, but business owners recognize the many other benefits they derive, including:

Better profits.
Gift cards and gift certificates require no inventory, take up no floor space, cost a fraction of what their face value is, provide cash up front (like an interest-free loan, paid back at pennies on the dollar), and all but eliminate costly returns of merchandise. In the case of restaurants, they represent sales for food that doesn't have to be immediately purchased, stored, and, if spoiled, thrown away.

Free advertising.
Word-of-mouth advertising carries more weight than anything that can be done in print, radio, or television. Gift cards and gift certificates are a tangible endorsement of a store or restaurant. Plus, they are usually presented to perhaps the most captive audience possible - the recipient and the group of friends and relatives watching as the recipient opens the gift. The experience has tremendous promotional power.

New business.
Two transactions occur with gift cards and gift certificates: the purchase and the redemption. Either one may represent the very first visit by the consumer. It's well known that gift cards and gift certificates are often redeemed for more than their face value, but purchasers of gift cards and gift certificates frequently buy other things while stopping in for their gift.

Satisfied customers.
Gift cards and gift certificates solve the problem of the giver's indecision. Retailers do well to make especially sure the redeemer's experience is a positive one and in the process, reduce the number of post holiday returns of merchandise

Mass marketing.
In addition to single sales, gift cards and gift certificates can be sold in bulk to organizations looking to make their presence known in their community. The cards or certificates can be used as a marketing fulfillment piece that represents your business in a personalized, professional manner. Large organizations could use them as corporate gifts or employee incentives.

Public relations.
Donating gift cards and gift certificates to charities and other non-profit organizations and events, like raffles, promotes the store name and brings in more traffic (which a donation of cash or merchandise does not). This is a very inexpensive way to get your name “out there” and look very reputable and conscientious in the process.

For merchants, givers, and recipients, gift certificates are "The Perfect Sale"! Let us help YOU make the most of them!