Consumers spent more than $23 billion on gift cards last year. We've pinpointed the best strategies for small businesses to help gift card sales soar.
For retail stores looking forward to the holiday retail boost, gift cards can be a significant bonus. Last year, consumers spent $23.6 billion on gift cards during the holiday season, with an average of $40 spent per card, according to data from the National Retail Federation. Here are some tips to help you capture your share of the gift card market this season.
Doubling Your Gift Card Sales: Sell Packages
Sure, gift cards can be perceived as a quintessential cop-out gift, pegging the gift-giver as lazy or impersonal. While that may be true of the preloaded value cards that big chain stores put out and that can be found in virtually every drugstore now, small businesses have the advantage of developing gift card offerings that are good for more than just cash on a card.
If you want to establish significant gift card sales at your business, you need to sell an experience, says Seth Gardenswartz, the VP of Business Development at SpaBoom and CoverBoom, a provider of online marketing tools and services to small businesses in the spa and restaurant industries. Everyone is pressed for time with their holiday shopping, so if your business is offering a unique experience with a gift card—from a prix-fixed meal, to an hour of cooking lessons, or a relaxing afternoon at a day spa—you're going to become a solution for the busy shopper and score that sale, says Gardenswartz.
Think about the types of experiences that you can offer customers through your business, and then create gift cards for several different price points. A fixed-money amount for a gift card limits the gift giver in what they are able to spend. Typically people have long holiday gifts lists and a budget for how much they want to spend on each person, but they will be more likely to spend $150 if they know, for example, that they are buying someone a deluxe spa package, says Gardenswartz. "Often times, the people who are buying gift cards are not your regular customers. So if they don't know anything about your business, then they aren't going to know how much to spend," he adds. "Providing customers with the opportunity to purchase different types of packages helps them feel like they are providing a more personalized gift."
It's helpful when putting together your various gift card packages to think about how each can appeal to people who aren't in your typical customer base. One example of this is in the spa industry, which is dominated largely by female clientele. However, many spa owners report that it is usually men who are buying spa gifts for the women in their lives and need some direction about what to buy.
But if you'd like to sell gift cards without a specific dollar amount attached, there's another benefit: They are exempt from the Federal Card Act. An amendment to the Card Act of 2009 went into effect in August and states that non-denominational gift cards are not subject to the federal laws in regards to expiration dates. Experience gift cards follow state law for the maximum amount of time until expiration. For more information about your state law, see the National Conference of State Legislatures.
Dig Deeper: Gift Cards Still Tops
Doubling Your Gift Card Sales: Clean up Your Website
Do not underestimate the role that convenience plays in the purchasing of gift cards during the holidays. While not everyone buys their gifts online, most people will at some point be browsing the Web for gift ideas during these final weeks, and the more they come across your website while shopping, the better. Anyone can easily go to the big box stores for the standard gift offerings, but most people would rather give a gift that's local to the recipient and shows that they put some thought into the purchase. Here's where small businesses have the advantage to shine. "Set your business up to play on that local field," says Gardenswartz. Make sure that you are showing up in search results for a local query. Optimize your website to include the name of your city or neighborhood so that when someone searches "coffee shop" and "Garden District" your business shows up in those listings.
Research data from Spa Boom indicates that onethird of gift-card purchases originate from outside the state of where the business is located. Your business will be more likely to get the sale from someone who is interested in finding a local market for their friend or family member if you claim your listings, says Gardenswartz. Make sure that your business is filed under the right neighborhood and there is the correct address information on sites like Google Places, Yahoo Local, and Yelp.
Getting people to arrive at your website is only part of the process, though. When it comes to service or retail businesses, Gardenswartz says the simpler your website, the better. "If you have music on your website, or it requires Flash, or has a 'click to enter' button, get rid of those things immediately," says Gardenswartz. These fancy website extras are only deterrents, and often result in people leaving your site before they even go inside.
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Doubling Your Gift Card Sales: Create a Campaign
Most customers won't think of you as a place to buy gift cards unless you put that information out in every part of your business presence. One of the easiest ways to let customers know that you offer gift cards is by using signage. The sign could say something as simple as "Ask about our luxury salon gift card package," or just "Buy a gift certificate today." You want all of your company materials to repeat the same message as well as provide information for where customers can purchase gift cards. Putting a sign up at the front desk or the checkout counter is great for getting people to notice. "We didn't shy away from opportunities to let people know about our gift cards," says Christine Cook, a spa industry consultant and former spa director at re:fresh spa in San Francisco, which was absorbed by 24-Hour Fitness last year. "You can put up a lot of signs and it's not going to be offensive or intrusive, it's just informational," she says.
