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By Gregg Zumbrum, First Data Merchant Services
Gift cards—consumers love them, and small businesses are reaping the benefits of one of the retail industry’s most favorable trends. A recent survey showed that 139 million people—64 percent of the U.S. population—purchased or received a gift card in the past year. And, more than half of those surveyed said they spent more than the initial value of the card they received. (1)
The Appeal of Gift Cards
A recent First Data research study showed that recipients of gift cards feel more thought has been given to their gift. They also said they are more likely to visit the issuing business more than once, and often spend more than the value of the card and reload the card with a higher value than the original gift.
Maximizing Merchant Benefits
Although gift card programs have been used primarily by large retailers, small to mid-sized businesses (including franchisees) can benefit from implementing a gift card program. A 2004 First Data survey of small to mid-sized businesses found that 82 percent of respondents indicated that offering gift certificates or gift cards has had a positive impact on their bottom line. The majority of merchants who implement gift card programs report an increase in their sales.
Most businesses are realizing that the best way to maximize their gift card programs is by opting for reloadable gift cards. Reloading enables the user to add or “load” additional money onto a card once the initial value has been depleted—a great way to encourage repeat visits by customers. And, many merchants now use gift cards to issue store credits or refunds, which is a great way to increase transactions while increasing customer loyalty.
Footnote:
(1) 2004 Value Link survey, a service of First Data
This article was provided by Express Merchant Processing Solutions (EMPS). EMPS, powered by First Data Corp., offers a comprehensive line of payment processing solutions, including gift cards & loyalty programs.
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