Gift Cards 101 – Things To Consider

The season of giving is just ahead of us, and what better gift to give someone than “money” for them to shop for themselves. Gift cards are a great way for retailers to gain revenue this time of year, as well as they offer many other advantages. As small boutique owners, it’s important you are aware of these benefits while also safe guarding your business with gift card guidelines that are specific to your store and business needs.

Setting Up Gift Cards Within Your Store Management System

The key to controlling when gift cards are purchased and then later used is essential. There are two main ways to do this as a small retailer, but the point is to make sure it’s being done. Your choices include:

1. Implement and self manage  your gift card program within your own store. This is often the most effective in cost for stores with only one or just a few doors total.

2. Invest in a software or support from a company that controls these details for you. If you have many associates, a busy online store, multiple store locations or simply want the most effective way to get this done, this is your option. One company to consider is Card FX, www.cardfxdirect.com, a direct marketing company designed to support retailers with gift card programs and more.

Which ever choice is right for you, make sure you are recording and tracking the following:

1. When the gift card was purchased. Include the full date, including month, day and year. State this clearly on the actual gift card as well as in your tracking records.

2. How much the gift card was purchased for.Include this in both written terms and numerical amount in your records as well as on the actual gift card. An example of this is what you would see on a check. For example, Fifty Dollars and no cents & $50.00. Make sure this is duplicatd for less opportunity for misinterpretation, error or theft.

3. The gift card number, which should be singular in the sense that no other gift card will have this number.This should be recorded on your end as well as clearly identifable on the gift card. If it is your first gift card issued, the number may be “1” or if you prefer “101”. Either way, keep track of the numbers in order from each gift card purchased.

4. Identify any rules that may apply to the gift card. If you have multiple stores and yet the gift card only applies to one of the stores, make sure this is clearly stated on the gift card. Any details that may come up as a potential problem later should be avoided by outlining these points to your consumer in advance.

5. If there is an expiration date to the gift card, make this known on your gift card as well as in your store tracking system. It’s also a good idea to let the purchaser of the gift card know this, as well. As a small business owner, it’s important to control the dollars coming and going out of your store each year on a tight budget. By enforcing an  expiration date, this helps you do this. Otherwise you may deal with gift cards coming when you have new management, new rules and new expectations. There are rules to this, however, that the government enforces per state. Learn more here regarding what is required by your state law, http://www.consumersunion.org/pub/core_financial_services/003889.html. 

6. Once a gift card is redeemed, make sure to document that it has been used. Note if it has been used in full or only partially. In addition, when possible include reference to the receipt of the purchase made with the gift card.

Benefits Of Gift Cards To The Retailer

It is pretty clear what the benefits of a gift card is to the receiver, but to a small boutique owner, online store owner or any other small business owner, the benefits are not always so clear. A few reasons to consider going through the steps to get a gift card program implemented for your store/s include:

1. Gift cards offer the opportunity for new customers to be introduced to your store.If someone receives a gift card and is unfamiliar with your store, they now have a reason to become famialir with it.

2.  Gift cards bring repeat business to your store. By having at least two visits occur from the purchase of one gift card – the first visit being at the time of purchase and the second visit being when redeemed – you have the opportunity to sell even more than just the value of the gift card. You could sell additional products or services at either time that exceed the value of the gift card.

3. Gift cards give people something to think about. When you receive a gift card, it’s fun to think about how you will use it. This adds excitement to the shopping trip for the consumer and often brings additional sales as a result.

4. When the size, color or style just doesn’t work out, gift cards always make a great option for the gift giver. Why waste  the opportunity for a sale when a gift card always works?!

Finally, make sure to make your gift card enticing and fun by making it look great. Don’t just xerox some gift cards on stock paper and call it a day. Take the time to make them look like something special. Use your store logo, colors and image to enhance the card and package it neatly and nicely. While you don’t need to invest a ton here to make this happen, find a way to still get it done affordably by  being creative. Visual impact goes a long way in retail and doesn’t skip past gift cards!

Have other thoughts or ideas on why gift cards are important for small retail owners? Let us know! Please comment below.