How Gift Cards Boost Retail Business
Gift cards continue to remain very popular with consumers despite increased inflation and consistent supply-chain shortages. According to Fiserv’s 2022 Gift Card Gauge, 58% of 1,000 consumers, aged 18 and older, plan to purchase more gift cards as an alternative to tangible products due to inventory shortages in 2022. At the same time, 46% of consumers view gift cards as their “go-to” alternative to tangible gifts.
Merchants who capitalize on customers love affair with gift cards can see positive returns.
Reasons Why Gift Cards Improve Business
- Boost Revenue – Gift cards are extremely cost-effective to produce and people generally view the amount on the gift card as free money. This results in two out of three consumers spending 38% more than the gift card’s value.
- Increase Traffic – Gift cards increase business two-fold: the customer who bought the gift card and the person who received it.
- Tracks Consumer Behavior – Gift cards can integrate with POS systems and provide data on transactions.
- Reduce Fraud – Gift cards do not carry personal data and aren’t easily duplicated like paper gift cards.
- Spread Brand Awareness – When customers love products or services, they share their experiences with friends and family by giving them gift cards.
- Builds Relationships with Customers – Using in tandem with a rewards program yields happy and loyal customers for return purchases.
- Unused Cards are Pure Profit – Funds that go left unused are pure profit for a merchant.
Milestones Drive Gift Card Purchases
Consumers purchase gift cards in connection with what they consider milestone events, such as anniversaries. 72% of respondents of the survey say that gift cards are an appropriate gift for milestone events.
Below are how the events are ranked in importance:
- Birthdays – Ranked as the most popular event for gift card giving, with 57% of respondents saying they plan to purchase a gift card as a birthday present in 2022.
- Graduations – 37% of respondents saying they intended to give a gift card as a graduation present.
- Thank You – 37% of respondents said they intended to give a gift card as a way of saying thank you to someone.
- Holiday Gifts – 33% of respondents saying they are likely to purchase a gift card during that time.
Learn About i3 Merchant Solutions’ eCommerce Solutions
Contact us online or call 1-800-621-8931.
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