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How to Run a Gift Card Program

How to Run a Gift Card Program

With a few simple steps, your small business can offer gift cards to your customers, and this could increase sales.

  • Gift cards increase earnings in two ways: when the gift card recipient buys more than the card’s face value, and when an unused balance is left on a card.
  • Most POS systems have a built-in gift card feature, so setting up a schedule is relatively straightforward.
  • Gift cards combined with a POS system allow you to link purchases to customer accounts, providing information about their shopping habits.
  • This article is for small business owners who are considering a gift card program.– Does your business sell and accept gift vouchers? Otherwise, you may be missing out on an opportunity to increase revenue, strengthen your brand, and improve customer retention. Gift cards are essentially an upfront payment for your business, giving you early income before the customer starts shopping. A gift card can be physical or digital.

How do gift cards work?

A customer initiates the purchase of the gift card, in person or online. If purchased in person, the cashier selects the POS system gift card program and activates the gift card with the specified amount. The customer pays for and receives the gift card, as well as a printed receipt with the balance of the gift card. The customer then delivers the gift card to the recipient.

If purchased online, the customer enters the amount or selects the available amounts from a drop-down list. The customer enters the recipient’s name and email address, writes a note and completes the payment. The system automatically sends the recipient an email containing the note, the gift card amount, a unique number or barcode to redeem, and instructions for redeeming them.

How businesses process gift card redemptions

Customers can redeem gift cards with a physical card, a printed digital gift card, or even a QR code on their mobile device. For the cashier, accepting the payment is as easy as selecting the gift card option in the POS system interface. The cashier then swipes the gift card if it has a magnetic stripe, scans it if it has a barcode, or manually enters the gift card number. The merchant account payment processor will approve the purchase if there is a balance left on the gift card and deduct the purchase amount from the balance. If the purchase costs more than the card balance, the POS will notify the cashier that another payment method is required to cover the deductible.

If there is a remaining balance on the gift card after purchase, a receipt will be printed to show the remaining balance and the cashier will return the gift card to the customer. If the balance runs out, the cashier can throw or recycle the card.

Redeem a gift card online

To redeem a digital gift card online, customers select “gift card” as their payment type at checkout. Alternatively, customers who have a pre-existing account can log in and add their gift card balance to their profile. Depending on how your website is set up, purchases will be taken from the gift card balance until it runs out, or the customer can choose whether to use the gift card balance at checkout.

6 benefits of selling gift cards

There are many benefits to selling gift cards, such as increasing brand awareness and improving cash flow. Here are six ways gift cards can help your business:

1. Create brand awareness

Because gift cards are branded with your business name, logo, and message, they act as an ever-present advertisement for your business whenever recipients open their wallets. Gift cards are among the most affordable marketing activities you can implement because they offer a compelling incentive to visit your shop or website. Also, the person who bought the gift card acts as your brand ambassador. Buying the card is a positive recommendation for the recipient.

2. Improve cash flow

When a customer purchases a gift card, she receives the money immediately and doesn’t have to wait until a recipient’s holiday or birthday to receive that income. If the recipient doesn’t use the gift card or uses only part of the balance, your business will have a lower total cost of goods.

3. Attractive to younger consumers

According to InComm’s Consumer Pulse study, millennials buy the most gift cards, accounting for 37% of gift card buyers. Gen Xers make up another 28%. Plus, if your market is made up of married women with no children, you’re in luck – half of the gift card shoppers match this description.

4. Expand your customer base

Gift card recipients may have never heard of your business before, but receiving a gift card makes them more likely to buy from your store. If you offer digital gift cards, capturing the recipient’s email gives you the ability to send them advertisements and promotions.

5. Enter the business gift market

Gift cards are great options for gifts from business owners to important employees or customers. The cards have a high perceived value but leave the recipient to choose the specific gift. According to a study by Blackhawk Network and Murphy Research, employees appreciate receiving gift certificates from their employers, with 69% seeing them as a reward. [Read related article: Creative Ways to Show Employee Appreciation]

6. Increase your sales during the holiday season

Even if what you sell can’t be easily packaged and put under the tree, you can increase your holiday sales by offering gift certificates. Gift cards are a boon for all types of service businesses, such as gyms, salons, car washes, and restaurants. In fact, DealDrop found that gift cards are the third most sought-after holiday gift, with 17% of consumers saying they want one.

How do i start a gift card program?

Physical gift cards vs. digital

First, decide whether you want to use physical or digital gift cards. Physical gift cards give customers something to present to the recipient and also act as ongoing advertising for your business, but they are more expensive and more difficult to implement. Digital gift cards are becoming increasingly popular, especially in light of the COVID-19 pandemic, and can easily be used for e-commerce businesses. These gift cards are inexpensive and easy to set up.

Regardless of the type of gift card you choose, you will need a POS system that supports gift card transactions. Here is a detailed overview of how to set up physical and digital gift cards.

Physical gift card configuration

  1. Research gift card suppliers. It can be your POS system provider, a merchant bank, or a third party gift card provider. Look for a vendor that offers custom options so you can use your branding and make the gift card attractive to customers.
  2. Choose a supplier, then design and order cards. Once your cards arrive, show them and start selling them. After purchasing a gift card, you will typically need to activate it for the customer. Establish gift card policies and train your employees about them.
  3. This includes how new gift cards are entered into the system, how they can be redeemed, any restrictions you have set on them, and how you promote them to customers. Make sure your policies comply with local and federal laws. For example, federal law prohibits businesses from selling gift cards with a maturity of less than five years from the time of purchase or from charging inactivity fees unless the card has been inactive for at least one year.

Setting up your digital gift card

  1. Set up digital gift cards on your POS system dashboard. Depending on your POS provider, you may be able to set up digital gift cards for free, or you may pay a monthly fee for this feature.
  2. Set up your eCommerce site correctly. Make sure you can sell gift cards and accept them as a form of payment.
  3. Train employees on how to accept gift cards. They will need to scan a printed or digital barcode or enter a unique gift card number. Make sure all employees know how to use the gift card feature in your POS system.

When customers purchase gift cards, you’ll typically have to pay a payment processing fee, just like you would with credit card transactions.

Tips for Running a Successful Gift Card Program

Simply ordering a set of gift cards does not guarantee that you will get the most out of your gift card program. These tips can make the difference between a lukewarm show and a spectacular hit:

  1. Make gift cards part of the customer’s digital wallet.
  2. If you order a physical gift card online, please mail it within 48 hours.
  3. Enable the purchase, transfer and redemption of gift cards across all channels (online, in-store and mobile).
  4. Allow sending digital gift cards via SMS. Consider partnering with one of the best marketing text message providers for this service.
  5. Give customers the ability to personalize digital gift cards with personal notes, photos, and drawings if possible.
  6. Configure your website to recognize selected digital gift cards and make the appropriate selections. For example, a Mother’s Day theme template can make your e-commerce site suggest jewelry or other appropriate gifts.
  7. Use gift cards as thank you gifts for loyal or high volume customers. This will increase their loyalty and encourage them to buy more.
  8. Instead of offering a discount during a promotion, offer customers the same amount in the form of a gift card, making sure they visit your business again.

Tactics to increase gift card sales

Now that you know how a gift card program can benefit your business, here are some strategies for selling as many as possible:

  • Show your cards prominently. Place your gift cards near the cashier so customers can grab one as a last-minute gift. You can also hand them out to larger retailers who sell a variety of gift cards on a shelf.
  • Suggest gift cards to customers. Teach your employees to suggest gift certificates to customers who don’t know what to give someone. Ecommerce sites can also display banners suggesting gift certificates, both during the gift season and throughout the year.
  • Promote gift cards on social media. Use your social media accounts to promote your gift cards. According to research by the Mercator Advisory Group, 46% of gift cards were purchased via social media in 2020.
  • Sell ​​gift cards at other local businesses. Contact local businesses and ask if you can partner with them to sell your gift cards in your location. Consider offering them something in return, such as selling your gift cards or displaying your brochures on the site.

POS systems that support gift cards

Many POS systems support gift cards. These are some of our best options.

Lightspeed retail outlet

Lightspeed Retail POS allows you to accept gift cards, but you will need a third-party gift card provider to create and purchase them. While any third party vendor can be used, the barcode on cards must be printed using EAN-13 or UPC-A standards to be compatible with the Lightspeed POS system.

Lightspeed can accept physical and digital gift cards if you have Lightspeed eCommerce enabled. Another benefit of this POS is that customers can use their gift cards both online and in-store, regardless of whether the cards are physical or digital. One downside is that the personalization of the email that Lightspeed sends to gift card recipients is limited. While customers who purchase a gift card online can select an image to include in the gift card email, the text of the email cannot be changed.

square point of sale

Square’s POS system provides everything you need to offer gift cards internally. You can buy physical gift cards from them with your logo and background pattern of your choice starting at 80 cents each, or you can design your own. The gift cards have a magnetic stripe and are reloadable. Square also offers digital gift cards. You can sell digital gift cards in person or online, but you can only sell digital gift cards online. Square charges 2.9% plus 30 cents for each gift card purchased online or 2.6% plus 10 cents for each in-person purchase.

clover point of sale

Clover’s POS system also provides internal physical gift cards, priced at $ 1 each. They also support digital gift cards that customers can save on their smartphones. Both physical and digital gift cards can be used in-store, but not for online purchases without a third-party integration. Clover charges a 2.5% processing fee upon initial purchase of the gift card.

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