Paper or Plastic?
One of the ways of building your business is with gift cards. Gift cards are an inexpensive way to draw more traffic into your storefront to increase your sales. These “electronic gift certificates” resembling charge cards are rapidly replacing the paper gift certificates that have been used over the years. Business owners are finding them easier to use because of the lack of record keeping involved.
Business owners can purchase gift cards for under a dollar apiece and the customer can purchase them for any dollar amount. This means that there is a tremendous markup on the price of a gift card and there is an opportunity for substantial profits. For instance, if the owner purchases a gift card for $.80 and the customer purchases the card from the owner for $50.00, the owner makes $49.20 before expenses.
Program for Retention and Loyalty of Patrons
Gift cards are easy to market and are an attractive item for the customer as the business owner’s logo, address, and telephone number may be printed onto the card. As the customer uses the card and shows it to friends and family, they are likely to inquire about the card and seek to purchase the card themselves. The business owner ends up attracting more customers to his store with a potential for more profits.
The customer can purchase a gift card for any amount. The business owner would run the blank card through his credit card machine which would encode the card with the purchased amount. The credit card machine keeps a record of the transactions on each card and the owner can also view transactions on-line. When the customer uses the card, the business owner runs the card through the credit card machine and enters the transaction amount.
When the customer returns to use the gift card and exhausts the amount, he can either request that the card be reprogrammed for a new amount or turn the card in at which time the business owner may sell it to another customer. If the customer is happy with the products and the service, he’ll replenish the card with a new amount.
Benefits of Increasing Sales Strategies
Gift cards are especially valuable for businesses such as restaurants, food stores, beauty salons, clothing, and liquor stores where repeat purchases are frequent. Customers are more likely to use and tell their friends about them. Unlike gift certificates, they fit in the wallet, and are less likely to be lost or damaged. Brenda Gilpatrick, owner of Your Fantastic Plastic says, "I've seen a lot of stores, upon their grand opening, mail out a $5 card."
Loyalty cards, on the other hand are used to encourage the customer to return to the store on a regular basis. The business owner awards the customer with points each time he makes a purchase. When he has accumulated enough points, the customer receives a free gift or service. For instance, the lodging industry makes use of loyalty cards to encourage patrons to return for their next vacation by offering a free night’s stay.
In conclusion, gift and loyalty cards are an excellent way to increase profits, attract more traffic into your storefront, and retain customers.
Gail Cavanaugh - Gail Cavanaugh is the owner of Gail Cavanaugh's Business Solutions, a company providing merchant services, website design, and marketing ...
