Has your small business launched a gift card program yet? While gift card use is common among big chain stores, many independent retailers haven’t implemented such programs, often because of the (real or perceived) difficulty of starting and managing them.
Gift cards can be susceptible to fraudulent purchases, making it essential to choose a program with strict security measures. Additionally, if you are using a traditional point-of-sale system or cash register, you may not have an efficient way to process gift card transactions, and it can be difficult to track customers’ card balances.
However, the benefits of gift card programs far outweigh these challenges: People who receive gift cards as presents typically spend $29 more than the value of the gift card, according to research from the National Retail Federation. Gift cards can help ramp up sales and expose you to new potential customers, and they can be used as a powerful reward incentive for special promotions.
So how can you effectively manage a gift card program? You have a few options:
Use a voucher system. Rather than offering traditional gift cards, some small businesses opt to offer their customers paper or digital vouchers for specific blocks of credit, such as $20 off store merchandise. These vouchers can generally be sold at the register or purchased online and printed at home. However, they offer limitations compared to a traditional gift card. Because they are paper or digital, they do not appear as “gift worthy” as plastic gift cards, and generally, customers must redeem the full value at once or lose their remaining credit.
Partner with a gift card management company. Some vendors offer retailers partnership opportunities that claim to take the pain out of managing the gift card process by marketing and distributing the cards. However, such companies don’t always work with small businesses, and they take a considerable share of the profits that would otherwise belong to you. And while such companies can process and fulfill online gift card orders, they cannot take responsibility for gift card-related transactions in your store.
Make the switch to an iPad point of sale system. Some iPad POS and mobile point of sale solutions enable retainers to process gift cards as easily as they process credit cards. What’s more, you can use the POS tool to set the card’s value, instantly check the user’s balance, and even add additional funds to the gift card. You can purchase custom-designed gift cards that are compatible with your card swiper, and can then manage the entire process of marketing, selling, and accepting the gift cards right from your store.