Small Business Retailers: How to Make Gift Cards Your Ticket to Success This Holiday Season

Small Business Retailers: How to Make Gift Cards Your Ticket to Success This Holiday Season

Written by Rosalie Murphy

How to create gift cards for your business, promote them, and prepare for customers to redeem them

This article is reprinted with permission from NerdWallet.

With the holiday shopping season right around the corner, a simple addition to your catalog can go a long way: gift cards.

Unlike other types of inventory, gift cards are cheap to produce, easy to ship, and unlikely to be returned. If you’re offering digital gift cards, they can’t run out — and you can keep making sales even a few minutes before exchanging gifts.

“People love to give gift cards,” says Rachel DeCavage, owner and creative director of Cinder + Salt, an eco-apparel company based in New England. “It’s a no-brainer way for them to give someone something they’ll love.”

People love to have them too. In an October poll conducted by the National Retail Federation, 55% of respondents said they hoped to receive a gift card as a gift this year.

Here’s how to make gift cards part of your holiday strategy, whatever you’re selling.

1. Create your own gift cards

You may be able to order physical cards or provide digital cards through your e-commerce platform or point-of-sale system. Physical cards usually cost less than $2 each, and digital cards are often free.

Physical cards are more popular gifts for Chicago-based indoor golf facility The Green, says founder and managing partner Conor Ptassin.

During the holidays, Ptassin estimates his team sends out “about 20 gift cards a week” to people who want to give their loved ones something physical.

Digital cards allow you to keep making sales until the last minute. DeCavage says she usually sees a rush of gift card orders “like three days before the holiday.”

The right mix of digital and physical cards depends on your customers. If most of your sales are made in person, physical cards may be more popular. But if more of your customers shop online and you tend to ship orders further afield, or if you’re trying to increase your online sales, rely on digital cards.

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2. Promote them as gifts

Display gift cards through your register and in a prominent place on your e-commerce website to catch shoppers’ attention.

“Just put it there on the counter and trigger an impulse buy,” says Jay Gavin, chief marketing officer at Blackhawk Network, which helps retailers create and sell gift cards and other reward items.

You can use gift cards to encourage other spending. This year, DeCavage is offering gift cards as rewards to customers who spend over a certain amount at Cinder + Salt.

“It might be an incentive for them or it might be something they can offer to someone else, and it looks like they’re getting a discount,” says De Cavage.

Make sure your cashiers know how to load gift cards using your point-of-sale system and how to package them. These transactions give your employees the opportunity to make additional sales, too: DeCavage encourages gift card buyers to add a little something, like a sticker, so it’s more exciting for the recipient to open.

“We’re trying to make it part of the shopping experience for people who aren’t really sure about what they’re getting,” DeCavage says.

Promote gift cards on social media and via email as well. A well-timed online marketing campaign can remind previous customers that you have gift cards available — especially if you can reach last-minute shoppers at the right moment.

Finally, Tassin recommends exchanging gift cards with other local businesses that serve similar audiences. This can help you reach new customers who may just need a boost to visit you.

Plus: Don’t make these 6 common small business marketing mistakes

3. Prepare for recoveries

If you sell enough gift cards, you may reduce the severity of another post-New Year’s headache: returns.

“A lot of times, what you see is a bunch of returns at the beginning of the year,” Gavin says. “Sometimes, those gift cards can help balance that out — the lull in the first quarter.”

Read: How your company can offer free shipping without hurting profits

Gavin adds that shoppers typically spend more than what’s on their gift cards.

Gift card shoppers often behave differently, DeCavage says. Instead of going straight to get the item they want, they tend to spend a lot of time browsing.

“For smaller retailers, gift card programs can be a low-maintenance and affordable way to compete with larger stores, while also helping to acquire new customers and encourage repeat traffic,” says Gavin.

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Rosalie Murphy writes for NerdWallet. Email: rmurphy@nerdwallet.com.

-Rosalie Murphy

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11-10-23 0501ET

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