The Gift Card Program is an easy method to increase revenue for small businesses, create brand loyalty, and bring in new consumers. Running a restaurant, a boutique, or an online retail store, making a gift card available provides the customer with the flexibility of using it as a payment option, encouraging repeat purchases, and improving cash flow.
With careful planning, the right strategy can make a good gift card program function both as a marketing device and a solution for customer involvement.
What is Gift Card Software
Gift card software can help small businesses to please customers and improve their finances. Even though 90% of people still like physical gift cards, 47% of adults in the US have gift cards that they have not used; in total, about 23 billion dollars. Digital gift card is a great way to sell them, especially during the holidays. When customers give gift cards as gifts, they tell others about the business, which leads to bringing in new customers. Using a gift card management system has many benefits for small business owners and their communities.
Gift cards encourage customers to return, shops and increase sales in shops. They also help customers recommend local businesses, which leads to more word-of-mouth advertising. Gift cards bring in new customers, customers expand the base, and often lead to high sales. In addition, gift cards help support small businesses and the local economy. They are not only valuable, but are also effective marketing equipment that customers build loyalty, support local stores, promote the economy, and strengthen community relations.
Reasons for Setting Up a Gift Card
- Installing a gift card for your small business can increase revenue, attract new customers, generate loyal customers, establish relationships with customers, and provide customer satisfaction.
- By collecting payment when paid and removing the purchase from stocks, moreover, when you can move forward, you should collect the upfront revenue.
- Existing customers can also give gift cards to friends or family, which can promote word-of-mouth marketing of word-mouth.
- Faithful customers return to your store to use the card, potentially spending more than the card’s balance, generating more revenue for your store.
- Establishing relations with customers can be obtained through promotion or an award for some expense levels.
- Finally, gift cards provide customer satisfaction as they support your business.
Gift Card Types
Gift card programs for small businesses can be categorized into open-loop and closed-loop options, although they may appear to be the same.
Open-Loop Gift Cards
Open-loop gift cards can be used at many stores, not only one. Companies like Visa and Mastercard offer these cards, and they work anywhere that accepts them. Some cards can be used only in some areas, while others have business names but work everywhere.
The best thing about the open-loop gift card is flexibility. People can spend them anywhere, and the payment system is accepted. But for businesses, there is no guarantee that customers will use the card at their store.
Some open-loop gift cards have additional fees. There may be an activation fee when purchasing a card, and an inactivity fee may be charged if it is not used for a long time. Even with these fees, these gift cards are a popular option.
Closed-Loop Gift Card
Closed-loop gift cards can only be used in your business. They do not have additional fees, so businesses and customers do not pay much.
There are two types. Merchant bank cards are given by a bank and are only used at your store. The seller cards are made by a company that runs a gift card program for you.
Closed-loop gift cards help customers bring them back to your store. But they have limitations. Those who stay away cannot be able to use them until there is an online option. They are a good way to increase sales and keep customers happy for businesses
How to Start a Gift Card Program?
Deciding the Type of Gift Card
You can order gift cards in different ways, like using a sales system or buying them from stores. Online gift cards may have a small fee, and gift certificates can be printed and tracked digitally. Some places offer both, like a spa that sells gift cards for any service and gives a “free massage” certificate. Gift certificates can be faked and are not very safe. Physical gift cards, like credit cards, can be ordered from sales providers or other vendors. Customers might like physical cards more than paper certificates or e-cards, so businesses should choose how to handle gift card orders carefully.
Choosing Gift Card Processor
To set up physical gift cards, look for providers that offer custom options to fit your brand. Design and order the cards, display them near the register, and start selling. Make rules for gift cards that follow local and federal laws. For example, federal law says gift cards can’t expire in less than five years, and inactivity fees can only be charged if the card has not been used for a year. Some states have their own rules about gift cards. Train employees on how to manage gift cards, including how to enter new cards and how to help customers use them.
Setting Up Gift Cards in Your POS System and Online Platform
Choose a safe and customizable digital gift card provider that works with your sales system and online store. Set up digital gift cards for free or for a monthly fee in your sales system. Work with your IT team to ensure everything works well for customers. Test the system before it’s available for use. Train employees on how to accept digital gift cards, including scanning barcodes or entering numbers. Make sure they know how to use the gift card function in the sales system.
Setting Up Physical Gift Card
If you have a store, you need to buy gift cards. You can get them from another company or a seller, based on what you like. Make sure to personalize your order with your logo, company name, design, and any other details.
Setting up Digital Gift Card
Pick a safe and customizable digital gift card provider that works with your cash register system and online store. You can set up digital gift cards for free or pay a monthly fee. Work with your IT team or system providers to make sure everything works for customers. Test the system before letting customers use it. Train staff on how to accept digital gift cards, including how to scan barcodes or enter special numbers. Make sure all employees know how to use the gift card feature in your cash register system.
Gift Cards Input into The System
Cash register systems have different ways to handle gift cards, but they are usually similar. Customers scan or swipe a blank card and then choose how much to pay. The transaction is done when the customer pays the card amount. Gift cards should show up as a payment option in the cash register system.
Establishing Small Business Gift Card Policies
After setting up the gift card system, teach your team how to use it, including how to process transactions and let customers pay with gift cards. Make sure they know any rules about gift cards, like limits on how many cards a customer can buy or if they can’t buy gift cards with gift cards. Also, keep track of sold cards and set expiration dates according to the law.
Selling and Tracking Gift Cards
Now that your staff understands the rules for the gift card program, you can start selling gift cards online or in your store. If your cash register system allows, you can track gift cards by linking them to customer profiles.
How to Boost Gift Card Sales
To promote sales, encourage repeat business, and construct customer loyalty, consider implementing the best practices to run a gift card program. Allow the gift cards to be part of customers’ mobile wallets, send physical cards within 48 hours, enable purchasing, transfer, and redemption to all channels, and allow digital gift cards to be sent through text messages.
Personalize the digital card with notes, photos, and design, and set your website to identify the curated card. Use gift cards as a gift to loyal or high-value customers to increase loyalty and encourage more procurement.
Conclusion
A good gift card program can help small businesses make more money, bring customers back, attract new shoppers, and build loyalty. By offering both physical and digital gift cards, using them in stores and online, and properly training staff, businesses can create a great experience for customers. Gift cards are not only a way to pay but also strong marketing tools that encourage customers to share their experiences, help the local economy, and strengthen customer relationships.