Using cards to retain customers & increase shopping frequency
Gift Cards have been around since 1995, and since that time, their popularity has exploded. Today, more than 50% of all retailers offer Gift Cards. By 2006, the U.S. Gift Card market will total $70 billion. The trend is the same in Canada. Almost a third of Canadian consumers say they are motivated to shop at merchants because they offer Gift Cards. 61% of Canadians have received a Gift Card; when they redeem it, about half spend more thanits initial value.
On average, customers will spend about $200 on Gift Cards a year. And they’re buying them frequently, about 5.6 Cards per year, 365 days a year. It quickly adds up to a staggering sales advantage. In today’s convenience-driven world, Gift Cards are a great way to shop – and an even better way to profit.
Increased sales are one of the biggest benefits of offering Gift Cards. Here are some sales possibilities:
Extend your product line. Gift Cards are “new merchandise” that you can sell to your existing customers, effectively extending your product line. Companies have reported that Gift Cards are their number 1 or 2 sellers.
Increase impulse purchases. Placed strategically in your store (e.g. at the cash), Gift Cards increase impulse purchases dramatically.
Gain loyal customers. The recipients of Gift Cards may also become loyal customers, returning for other purchases after their initial visit to redeem the Card.
Customers spend more. Many customers who redeem Gift
Cards actually spend more than the value of the Card.
Sell more items at full price. 40% of Gift Card shoppers will purchase items at full price (compared to just 16% using
other payment methods.)
Retain the unused portion. What happens if the Gift Card is never redeemed or it has an outstanding balance? You still win. The unused value stays in your account after the Card expires. Any way you look at it, Gift Cards add up to increased top line revenue.