What do people want most for the holidays? Gift cards. According to the National Retail Federation, 62 percent of consumers indicate that they’d like to receive a gift card, and the majority of them will overspend the value of the gift card. For smart business owners, gift cards can translate to more revenue at redemption.
The time, cost and redemption barriers that used to exist in the gift card industry are gone. In fact, your babysitting niece can create her own gift cards and have them in the hands of every mom in her neighborhood in less than a week. Gift cards are easy and inexpensive to create. But before you get started, keep these tips in mind.
1. Find a reasonably priced gift card supplier
Square is an example of a low-cost gift card supplier. Square's custom gift cards work with the Square Register. Gift cards start at $1.50 per card with a minimum purchase of 125 cards. When your customer purchases the gift card, you can load the gift card value from your Square Register and receive the funds right away. There are no additional charges outside of the $1.50 charge and standard processing fee. With Square, you can choose a template or create your own design.
2. Pay attention to gift card laws
Title IV of the Credit Card Accountability Responsibility and Disclosure Act of 2009 limits gift card redemption fees and expiration dates. By law, the gift card must have an expiration date greater than five years from the date of issuance or when funds were last loaded to the card.
In some states, you may claim the cash value of unused cards after the expiration date. However, other states require that you report the unused cards as unclaimed property. Unclaimed property must be surrendered to the state through the escheatment process.
3. Tell your customers about gift cards
Your customers can’t purchase gift cards if they don’t know about them. If they’ve purchased from you multiple times in the past or are using your services frequently, you can probably bet that they like what you have to offer and would be willing to share gift cards with their friends. You may even want to offer existing customers a discount on your gift cards to entice them to purchase one for themselves, as well.
4. Know you can offer gift cards in any industry
Many service-oriented small businesses don’t believe that people would buy a gift card from their business. But gift cards can work in all types of industries: People need their teeth cleaned, backs adjusted, dogs walked, hair cut, houses cleaned, lawns mowed, bugs removed and taxes done.
If your business serves other businesses, the same is true. Businesses need graphics created, content written, websites updated, contracts reviewed, and taxes completed. If you sell anything successfully, it’s likely that a gift card will work for you.
5. Get started now
The benefits for your customers are obvious. Gift cards are easy to buy, use and offer your customers as an option that that helps them stick to their budget. As a business owner, gift cards mean increased revenue, new customers and repeat sales with minimal overhead. In fact, you can even reuse or recharge the gift card when a customer uses the value of the card.
Whether you’re a dentist, landscaper, retailer or information provider, your business should offer gift cards. Implementing a gift card program will not only attract new customers but also provide an easy way for existing customers to share their love and passion for what you do. Don't let money slip right through your small business—get out there and offer gift cards.