Benefits of Gift Cards
Why Both Consumers and Businesses Love Gift Cards
Both merchants and consumers love gift cards. For merchants, gift cards provide additional profits. For consumers, they are an easy gift for hard-to-please family and friends. Particularly as the holiday season approaches, businesses should get their gift card processing programs in gear to prepare for increased traffic to their stores.
Holiday shoppers spent more than $31 billion on gift cards in 2014. The average person spent about $170 on gift cards during the 2014 holiday season.(1) No matter what industry business owners are in, it's likely they and customers can benefit from a gift card program.
The benefit for business owners
There are a number of benefits of gift cards for business owners. Gift cards provide an additional stream of revenue on top of normal products or services. Much of the time, shoppers don't restrict themselves to just the funds on the card. In order to make the most of their gift card balance, they will often spend more. As a result, business owners benefit from more revenue. Another benefit of selling gift cards is increasing brand awareness and attracting new customers. When stuck for a present idea, a customer may buy a loved one a gift card to a favorite restaurant, hoping the recipient will like it too. In this way, gift cards can increase awareness of a business by bringing in new customers.
Why consumers love them
Holidays and birthdays can be stressful for consumers. They often have long shopping lists and still want to make gift recipients happy. Gift cards allow them to do this more easily. According to National Retail Federation's survey, consumers seek out gift cards for numerous reasons (1). Gift cards allow recipients to select the gift they like best. In addition, they are easy and fast to buy. For last-minute shoppers, gift cards are an ideal present. Shoppers can purchase gift cards quickly and be sure the recipient will find a way to spend the money in a way that makes them happy. Some consumers may even choose to reload the funds on their gift card and use it as a personal debit card for a store, which makes it seamless and easy for them to pay.
It's clear that both consumers and businesses benefit from gift cards. Consumers love the ease of purchasing a gift card, while businesses are able to gain more revenue and increase visibility with this strategy.
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