The gift card market is huge and growing year by year. But what makes a gift card scheme a success and how do you go about setting one up?
A successful gift card scheme can be transformative for any retailer or consumer-facing business, and it’s now an integral part of most medium and larger companies’ employee reward schemes.
Let’s look first at the advantages of setting up a gift card scheme.
What are the business benefits of a gift card scheme?
There are two significant benefits of a gift card programme: increasing sales and encouraging customer loyalty. When you dig a little deeper, those benefits can turn into real business growth.
According to the UK Gift Card & Voucher Association’s 2017 State of the Nation report:
- 72% of consumers spend more than the value of the gift card in their hand when they use it – 55% extra on average.
- Some 60% of consumers discover a new business or brand because they’ve received a gift card.
- Almost 18% of them go on to become regular customers.
Gift cards also:
- Improve cash flow for your business.
- Increase profits on those occasions the full value of the card goes unspent.
- Put your brand front of mind.
- Reinforce perception of your business as a professional, established provider.
Something like £4 billion is spent on gift cards in the UK. They’re ideal for retail operators, of course, but every bit as useful for all sorts of service providers; gyms and health clubs, beauty salons and barbers, cafés and restaurants, entertainment providers and more besides. And half of the vast market value goes through company reward schemes.
The simple truth is that gift cards are the go-to purchase for most consumers when pushed for time or faced with buying presents for someone they don’t know well or someone who already ‘has it all’.
You’ve just made life an awful lot easier and provided the gift the recipients get to choose themselves. There’s the value of goodwill in that, particularly for small and medium-sized businesses.
How do I set up a gift card scheme?
First, choose your plastic card supplier. Most gift cards are made of PVC because of its durability, although there are eco-friendly versions available.
Remember, as well as the value of the card to you and your buyers, just like loyalty cards there’s a marketing opportunity. Any gift card should be fully branded, and as well as the value you can choose to add messages to consumers to reinforce your image. It’s surprising how often key information, like website addresses, are left out of gift card designs. If you don’t have an in-house design department or a creative agency you already use, make sure you choose a gift card supplier with its own design team.
Buying in bulk is usually more cost-effective, and many suppliers allow print-on-demand or offer warehousing and fulfilment, so that you can simply call off new cards when you need them.
Secondly, enter your cards into your POS (point of sale) system. Gift cards with magnetic stripes are a little faster to enter than those with barcodes, but both work similarly. Talk to your POS supplier to make sure you’re choosing the best option. As you enter each card, you assign it a monetary value: £10, £20 etc. The card will then track its value automatically whenever money is spent through your POS. If you’re considering allowing your gift cards to be used on your website, talk to your card provider about scratch-panels for increased security.
With your cards in stock and registered with your POS system, the last step is all about awareness. Put a sign up in your store or business reception; publish the news on all your social media channels; issue a press release to relevant local, regional, national and trade media; use sales incentives (eg buy one £20 gift card, get a £5 gift voucher for yourself, or reward purchases over a certain value with a free gift card); and if you already have a loyalty card programme or customer newsletter, use the mailing list to reach out to your existing card-holders and subscribers.
Above all, make sure that your entire team – and any partner shops, businesses or corporate reward programmes through which you might sell your gift cards – understands everything about the scheme, from expiry dates to top-ups, and is actively promoting them at all suitable opportunities. That can be as simple as guiding an indecisive or wavering customer towards the gift card answer to their present-purchasing dilemma.
What makes a gift card scheme successful?
Getting to know your customers better.
Tracking your gift card usage
At a basic level, this means keeping a close eye on gift card display areas and stock levels to ensure unwavering availability; not just in your own store or business, but with any shops or partners which sell your cards. Choosing a reliable gift card supplier will also make this easier, with the ability to print on short notice or on demand, and who can be trusted to keep you up to date on any stock they hold on your behalf.
At a more detailed level, this means analysing the gift card programme take-up. What percentage of your sales do they form? What are the typical values purchased and the typical transactions made when they’re spent? Which incentives result in increased gift card sales?
For more advice on what you need to set up a gift card programme for your business, just get in touch with our friendly team.