Gift cards are great for gift buyers, especially near the holidays when lists can seem to stretch on forever. Simply find the store the gift recipient likes best, select a denomination and either order it online or swing by and pick it up. Gift cards are convenient because they are easily purchased (in store or online), quickly wrapped, simple to ship and always the perfect fit.
The reason consumers love gift cards is a no brainer, but have you ever wondered why nearly every retailer offers a gift card option? We’ve complied a quick overview of the retailer benefits of offering gift cards for their clientele.
1) Customers spend more than the amount on the gift card
In most cases, retailers can count on consumers shopping with a gift card in hand to spend more money than the face value of the card. According to cebglobal.com in 2014, 65% of gift card users spend 38% over the face value of their gift cards.
The gift card functions as a reason for consumers to not only visit your store, but to spend more than they normally would
The use of a gift card can actually increase overall ticket sales. This comes in especially handy following the holidays when sales can have a tendency to stall.
2) Customers are more prone to pay full price when shopping with a gift card.
According to cardcash.com, customers are 2.5 times more likely to purchase a good or service for full price when they pay with a gift card.
That means higher profit margins especially when you consider that consumers typically spend more than the amount that is loaded on the gift card. The combination makes for the perfect situation for the retailer – higher ticket sales on full priced items.
3) Gift cards increase brand awareness
Brand awareness is a measure of your business’s recognition by customers. Gift cards can serve as a great representation and function as a perpetual reminder of your business. My1Stop specializes in professionally crafted gift card printing. Don’t forget to complete the perfect look of your gift card with a gift card carrier. While you are customizing your gift card and gift card carrier, keep in mind that woman are nearly 2 times more likely than men to make a purchase because of design.
4) Not all gift cards are actually redeemed
With the influx of gift giving around the holidays, it can be easy to forget about a gift card received in a Christmas card from out of town relatives or friends. It’s easy to accidentally throw it in the trash or toss it in a junk drawer to be lost forever.
When a gift card goes unredeemed it’s just as good as cash in the bank for retailers. Consumer Reports estimates that nearly a quarter of Americans who receive gift cards during the holidays typically have at least one lying around nearly a year later.
The Bottom Line
From the consumer’s point of view, gift cards are the perfect gift that is never the wrong size and always within their budget. With just the click of a mouse or a quick in and out trip to the store, gift cards are easy to purchase and just as simple to give. Retailers, on the other hand, love gift cards for their potential both used and unused. From higher ticket sales to straight profit from lack of redemption, gift cards are a vital part of any retailer.
