As a business owner, do you want to miss out on even a tiny slice of a $31.74 billion pie? If you’re not providing gift card services, that’s exactly what you’re doing. As gift cards grow in popularity, it becomes more and more critical for every business that sells food, goods and even services to provide gift cards for their customers and have reliable gift card processing integrated into their Point of Sale (POS) system.
Gift Cards – The Gift of Choice
For many years, gift cards were deemed impersonal or were mainly bought because they were convenient. However, they have now become a practical gift choice for millions of holiday shoppers. A survey conducted by the National Retail Federation (NRF) showed that a staggering 62% of shoppers would like to receive a gift card. Far from being considered impersonal by the recipient, they have actually been the most requested gift item for eight years in a row.
The NRF started tracking consumers’ intentions to buy gift cards for holiday gifts back in 2003, and total spending on gift cards since that time has increased by 83%. If you think your customers are too old, too young or too whatever to buy gift cards, you’re probably wrong. Adults 65+ years old actually spend the most on holiday gift cards ($204.59 on average), but even the group projected to spend the least on gift cards this year (18-24 year olds) will spend an average of $113.75 on them this holiday season.
Why Gift Cards?
Beyond the huge amount of money that is spent on them each year, you may be wondering what other benefits gift cards offer. For starters, we’ve found that restaurants that switch from paper gift certificates to plastic gift cards typically see a 50-100% increase in sales. Additionally, most gift cards are used within 60 days of being issued, and 72% of customers using a gift card will actually spend more than the value originally loaded on the card.
Make Money the Easy Way
On the other hand, did you know that 27% of gift cards are never redeemed and about 40% of those that are redeemed aren’t redeemed for the full value? As a store owner, you’re going to want to be able to capture at least some of the unused balances left on gift cards. The simple solution is to choose a system that doesn’t process your gift cards through a third party company. This also saves you from having to pay swipe fees and transaction fees.
People have many different reasons for purchasing gift cards, including allowing the recipient to choose their own gift, fast and easy purchasing, and sticking to a holiday budget.
No matter what their reason for buying is and no matter how you look at it, choosing to offer gift cards to your customers just makes sense. The holidays are upon us, and the big holiday shopping season kicks off soon. Don’t miss out on your slice of the gift card pie.