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Gift Cards Serve Retention More Than Acquisition


Marketers use gift cards slightly more for consumers than business-to-business customers, and more for customer retention than acquisition.

And while gift-card use is on the rise, less than 10% of U.S. businesses use gift cards as customer incentives, according to a survey of 68 U.S. businesses conducted by electronic payment processor First Data Corp.

That could quintuple next year: 52% of all respondents plan to offer gift cards in 2006, and 20% of current users plan to offer more cards next year.

First Data found that 77% of businesses use their current customer gift-card incentives for retention, versus 51% for acquisition. Forty percent of companies with customer incentive programs rely on gift cards, second only to product discounts (used by 52% of respondents).

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