Operating a successful gift card program
Although a gift card program may seem like easy money, it isn’t right for everyone. Here are some additional considerations to ensure your program will deliver the results you want.
- Ensure profitability. Before you implement a gift card program, do the math to make sure you’ll receive the desired return on investment. Factor in the costs associated with cards, transactions, startup, and monthly fees, then weigh that amount against the additional business you anticipate from a gift card system. In particular, if you’re offering a loyalty program, carefully determine how much you can offer as an incentive while still realizing a strong ROI.
- Make it easy to use. To guarantee speedy adoption, your gift card program should be easy for customers to understand and even easier to take advantage of. Don’t make them jump through hoops to collect rewards. Give them all the details on how your gift card program works either through a printed brochure or a link on your website. If you need to make adjustments to your gift card policies, or cancel the program altogether, give your customers plenty of time – at least a few months – to redeem earned points.
Get the word out. Once you’re sure the numbers work and you’ve crafted an enticing gift card program, it’s time to let your customers know. Effective promotion is critical to your success. First, understand that “eye level is buy level.” Always display gift card systems in highly visible locations, particularly near checkout lines to encourage impulse buying. In fact, since the cards don’t have value until you activate them and are almost impossible to counterfeit, feel free to strategically place your cards throughout your location, even in places without supervision.
Many retailers large and small also promote their gift cards through third-party retailers, like local grocery chains or drugstores. In doing so, you not only increase the visibility of your brand but also enable one-stop shopping, providing the potential to buy your gift card without requiring customers to make an additional stop at one of your locations.
Remember that every unit sold through a gift card program represents two customers for your business: the buyer and the recipient. While you can only track results from gift card use, the person purchasing the card may buy something in addition, whether it’s an impulse buy or something in response to a promotion. Even if they don’t, a successful gift card program causes them to keep you in mind for future purchases.