The Power and Wonder of Gift and Loyalty Card Programs - Part I
Electro Image LLC

Would you like to be a part of the $200 billion in merchant sales in the upcoming year? Then it may be worth implementing a gift or loyalty card into your marketing plan. With these cards, small businesses have a powerful way to compete in the marketplace.

giftcardsWhat your company gets out of its gift and loyalty program depends on the effort and commitment you invest. Before you jump in with both feet, however, it’s important to understand the costs, profitability and psychology of a gift and loyalty card program.

Let’s talk about what’s involved with setting up a typical small business gift and loyalty card program. We’ll say the small business in this example has ordered 250 cards. The benefit of gift cards lies in the company’s ability to track the card’s activity by setting up the gift card program to work with your company’s POS (point of sale) terminal. Here’s how it works:
A customer purchases a gift card, paying with cash or a credit card. When your employee scans the barcode on the card, he or she swipes the card in the POS terminal that activates the card.

Next, your employee inputs the purchased amount (load value) onto the cardholder’s account. Once the gift card is purchased, both the vendor and the customer get a receipt.
Later, when the customer uses the gift card to make a purchase, the card is swiped through the POS terminal for the amount of his or her purchase. The POS system deducts this amount from the card and shows the card’s new balance.

The receipt that’s printed from this transaction shows the purchase data along with the new balance on the card. This new balance can also be viewed on the POS terminal.
Experts estimate that approximately 20% of gift card holders don’t spend the card’s full value. What’s that mean for your company? The remaining balance goes to your company’s bottom line. Additionally, returning customers generally spend 30% more than the gift card’s face value, known as uplift.

Gift cards make great promotional tools used as incentives to bring back current customers or attract new customers. And when it comes to returned items, consider a gift card for payment. This inspires a customer to return to your store rather than a competitor.

Part TwoPart Three

Subscribe to our newsletter
Sign up for our newsletter!

Receive special discounts, project spotlights and valuable news.