Tuesday, October 1, 2013

Gift cards

So what is the point of a gift card?

The point is to try and grow your business. This is done in 2 ways.
  1. Have a customer base that will spend money in your store and only your store.
  2. Have a cash balance sitting in a holding account accumulating a interest revenue very month/year that the money is there and unused.
     This is ideally a great idea to do. For not all gift cards will be used entirely up (Thus a small percentage of money is unused) thus the interest on the unused balance is a automatic profit for the company after a period of time as well as the interest accrued on that balance.

     Also for a percentage of people that do use the card('s) to get the benefit of the discount program albeit knowingly or unknowingly would and or are more likely to refill the card knowing that there is a balance of some sort on the card, thus getting the person to come to the place of business at least 1 more time if not more than that, thus a better chance of increasing customer loyalty and repeat business from someone that may of been a 1 time transaction.

In other terms
These become a long term repeat customer that is a guaranteed income over and over again.
This is the best type of customer no matter the business or the dollar value that is spent there.

     Then you have the people that will continuously refill the card for convenience instead of always using a debit/credit card and also better tracks the expense that is done there (Budgeting people).

But now the question posed is this.

     What is the increased benefit of a gift card that also has the benefit of a companies discount program attached to it!!!!

     Better advertisement of the company by the cheapest for of advertisement "Word of mouth".

     Now it is true a implementation of such a program is not easy to do if this was not done from the start of the discount program, however it can be phased in over a period of 1 year or less (depending on the size and regionalism of the company).

     Now there are people out there that work for these companies that say this would require too much extra work to have done.

     That simply is not true, most discount cards if not all can be swiped even if any of the items being purchased are not part of the discount program and no extra benefit is applied to the purchase.

     All that is required is for the gift card to be programmed with the generic code of all 0's or the like, thus when the card('s) are scanned the system sees the code and applies it as it would normally do for the normal discount card, if a discount is applicable the system would apply it if no discount is applicable then it does nothing as it already would do other than showing that the card was scanned and the balance does not change.

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