When planning a gift or loyalty card program for your business, you should have two goals in mind.
First, the program should increase your customer base.
Second, the program should maintain your existing customer base as well as your new customer base.
But first, there are certain legal requirements to keep in mind. New federal legislation prohibits expiration dates or fees on gift cards. The only case where expiration dates can be used on a gift card is if the card is given away during a promotion for specific goods or services. With gift and loyalty card programs, businesses must always be aware and comply with existing and emerging legislation.
One of the best benefits of gift and loyalty card programs is the psychological effect it has on customers.
Gift card recipients often perceive the value on the gift card as “found money” or “free money.” A gift card feels like a credit card but the psychological effect is much stronger because it’s the same as cash so once you make your purchase, the debt doesn’t follow you home. This is why customers using gift cards spend more in your store or place of business.
Similarly, customers with FREE $5 gift cards for your store are that much more likely to shop at your store instead of a competitor.
Larger businesses may rely on a display within their business to promote the loyalty card, but smaller businesses have success including gift and loyalty cards to their direct mailings, as holiday or promotional gifts, special discounts, and on printed marketing materials. Gift cards are also a win-win when it comes to charitable donations. Not only is your business helping a good cause, it is generating name recognition as well.