The Best Ways To Add Gift Cards For Small Businesses
Gift cards have long moved past being a simple craze or gimmick. They have become a hugely effective way to increase profits and, in some cases, are a nearly essential option for businesses to offer. (Take it from someone whose son requested for gift cards last Christmas and, when asked to be more specific, replied “I don’t care from where. I just like gift cards.”)
This is why virtually any point of sale company worth its salt either offers its own gift card functionality or integrates seamlessly with a gift card company. It is a low-cost (or sometimes no-cost) way for businesses to bump sales, increase brand awareness, and encourage repeat business. But if you’re a small business owner already putting in 80 hours a week just trying to keep your head above water, the thought of adding gift card functionality might seem complex or time-consuming. In this post, we’ll try and assuage some of those fears and explain the different types of gift cards available and how you might go about offering that feature to your customers.
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Gift Card Benefits
First, let’s briefly talk about the benefits of adding gift cards to your small business.
- Branding: In this day and age, anything that gets your name or your logo out into the public is a plus for your business. You can sell your own merchandise and send customers out the door with personalized shopping bags and your own unique gift card can have the same effect.
- Spending Boosts: Studies have shown that the majority of gift cards users spend more than the total on their card. The confidence of knowing that at least part of their purchase is already covered can spur the customer to potentially buy more than he or she had originally intended. On top of that, gift cards have already been purchased so, if it goes unused or there is a small balance left on the card, you still get that profit.
- Repeat Business: Once you’ve set up gift cards, it makes it easy to run marketing or promotions to attract new customers or garner repeat business. Obviously, someone who purchases a gift card and gives it to a friend or family member who may not have previously been inclined to visit your store is a big bonus. However, you can also tack on promotions that, for example, give the purchaser a small gift card as a bonus for purchasing a gift card of a certain amount. You can also give an additional credit good for a customer’s next purchase once they’ve used their gift card.
- Ease: Setting up or purchasing gift cards is generally a very simple process whether you’re going directly through your POS system or a processing company. It can be as quick and painless as clicking a few buttons to activate electronic gift cards or you can order physical cards, providing your design and company name. If you don’t currently have gift card functionality, chances are customers have asked about it at some point and, for minimal time and money, it’s nice to have that option available.
Gift Card Options
So now let’s give you a few examples of the types of gift cards you can purchase to see what might be the best fit for your individual business.
- Electronic Gift Cards: This is the easiest way to utilize gift card functionality. A handful of POS companies, generally those that offer their own in-house processing service, give you the ability to purchase e-cards which work the same as cash and can be sent to a friend or used by the customer online or in store. Square offers one of the better electronic gift card platforms at no extra cost aside from the flat processing fee. The balance is saved online and can be easily searched by customers and applied and used from a customer’s home. You lose some of the benefits of branding by not having physical cards in your storefront, but you can’t beat the convenience.
- Bar Code Gift Cards: If you would like to set up physical gift cards, you will likely have one of two options. If you get gift cards with bar codes, it will act as a unique account for the customer that uses it. You have the ability to store and search a customer’s information via their account. When the gift card’s balance hits zero, there will also be the option to reload it with any amount.
- Magnetic Strip Gift Cards: The other option for physical cards is to have magnetic strips. These function similarly to bar codes, with each strip acting as an individual account for the cardholder. The cards are swiped like any debit or credit card and the amount is automatically deducted. The only issue with magnetic strips is that, if the card is stored for a long period of time in a wallet or purse, the strip can eventually wear out.
How To Set Up Gift Cards
Now that you’re aware of some of the benefits of a gift card program for your business as well as some options that are available, let’s briefly talk about how to add them to your offerings. If you are just starting out or in the market for a new point of sale system, or if you’ve been up and running for a while and want to implement gift cards now, you can usually find out what a company offers either on its website or with a quick phone call.
If the company offers its own gift card program, make sure to check if it’s an additional add-on. While Square offers gift cards for free, a company like Toast, which has built-in gift cards, charges an extra fee for that function. To use Square as an example, you can get up and running with gift cards simply by logging into your account and activating them with a few clicks online. You can set up electronic cards or order custom physical cards (80 cents per card). The processing fees are clear and upfront.
Other companies may integrate with one or a handful of companies that specialize in gift cards. Again, you will want to see if these integrations are free or come with a fee. The easiest way to set up gift cards with a third-party integration is still to go directly through your POS system to make sure that it syncs up seamlessly.
Lightspeed, for instance, a company that offers both a Retail and Restaurant version of its POS system, uses a third-party vendor for its gift card program. You must purchase the cards on your own and activate them, but you can create custom cards to your specifications and, once you have activated the strips or bar codes, it’s easy to sell them on their own, accept them as payment, or check balances.
You can also shop around and select your own gift card company directly from a processor if you have specific or unique needs that your POS system’s gift card functionality doesn’t provide. But if you plan on using these cards in concert with your POS, make sure that they’re compatible first. Some companies have a system in place where, if you already have a gift card provider from a third-party, you can seamlessly transfer your information into their own program. Clover POS, for example, offers digital and electronic gift cards (with a template of 70 designs) and makes converting to Clover Gift Cards a simple process.
Should You Accept Gift Cards In Your Small Business?
With businesses around the country doing upwards to $30 billion a year in gift card sales, it’s obvious that this is an extremely popular and profitable venture. And you don’t have to be a massive retailer or restaurateur to reap the benefits. As you can see, setting up gift cards is a fairly simple process that gives you the freedom to choose the best option for your own company while expanding your brand. And it can all be done at a minimal expense.
If you haven’t taken advantage of this functionality yet, it might be time to do some research or simply contact your point of sale provider to see what your options are. In some cases, it’s as simple as a few button clicks to get you up and running.