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5 ways gift cards can drive sales and win customers this holiday season

November 8, 2017

The holidays are upon us again, and one of the most flexible tools small merchants can use to get more sales during this time of year are gift cards. There are more ways to use gift cards to support holiday revenue than might immediately come to mind. Here are five tactics you can use to make the most of this versatile tool.

1. Sell them as gifts.

This is perhaps the most obvious use case. Gift cards have been the most requested item by gift receivers for 10 years in a row. They provide the gift receiver with the flexibility to select an item they like.

As for givers, they can have it both ways: a branded gift card from your business is arguably more thoughtful than a generic, prepaid gift card from a credit card issuer.

2. Get cash up front and a post-holiday bump.

Seventy-five percent of consumers spend an average of $38 more than the value of their gift cards when they redeem them. This means you receive the upfront cash upon the gift card purchase, plus the potential for a little more revenue when the customer redeems their gift card for an item or service.

And if the recipient has never shopped with you before, gift cards can represent a chance to win a new repeat customer, which can mean even more revenue throughout the year.

3. Use them for rewards and store credit.

A rewards program is an effective way to increase customer loyalty. Consider using gift cards to reward customers for repeat visits, or for spending a certain dollar amount at your location. Remember the statistic about the majority of gift card recipients spending more than the value of their gift cards? Expect additional cash from your customers when they redeem the gift cards you give them as rewards as well.

On the flip side, a gift card can also be a great way to manage returns and store credit. If gift-givers didn’t purchase a gift card for their loved ones in the first place, you can create another opportunity to keep dollars circulating within your business by giving returning customers gift cards instead of cash for returned items.

This is also an effective tactic for handling returns throughout the rest of the year.

4. Make them the reward for customer list-building promotions.

If you’re looking to grow your social media followers and/or email list, offering a gift card to people who connect with you can make for a compelling prize. With a gift card, increase the likelihood that contest entrants can exchange that card for a product or service they’ll like.

5. Do local cause marketing: use gift cards as prizes for fundraisers.

Sponsoring a fundraising prize can be an effective way to give back to a community or cause you care about. It can also offer branding value for your business.

Consider offering a gift card as a fundraiser prize. You’ll get the brand recognition from being announced as fundraiser supporter, and you may earn additional goodwill through this accessible form of community-based “cause marketing”–a recent study cited in AdWeek concluded that seven in ten Americans like brands who engage in cause marketing (either in general, or if they agree with the cause).

As for the recipient, not only will receiving a gift card enable them to choose their own reward, it will also enable you to get them into your location, giving you a shot at converting the recipient into a repeat customer.


Ready to maximize your sales with gift cards? Get started here.