Companies and businesses across the world are embracing the advantages of using gift cards. Gift cards can build brand loyalty and improve image for a variety of businesses. Retail companies, restaurants, and even service oriented businesses are now offering gift card programs for consumers.
In the fast pace of today’s modern world, many consumers have limited time for finding gifts for friends and loved ones. Gift cards offer a convenient alternative to the traditional gift, allowing the gift receiver to use any item or service offered by a particular retailer. When gift cards are purchased, a consumer has locked themselves into a future purchase from a company. Many gift card processing services report redemption rates around 90%. In the United States, a study in 2006 reported that approximately 10% of gift cards bought that year were not redeemed, leading to gains for retailers of about $8 billion dollars.
Gift cards offer many other advantages for both consumers and businesses. Traditional gift cards offered from credit card companies often carried a fee of around 5%, and a fee for purchasing the card. Many retailers offer giftcards for their company at no fee, along with a complementary written card and packaging.
Gift cards can also be used as part of an effective marketing campaign. Many gift card processing companies have evolved from simply providing cards, to increasing sales through novel marketing campaigns. Gift cards can be used to promote savings through limited time discounts and promotions.
One recently founded company has revolutionized the gift card market. This company provides discounted gift cards at 50% of their retail value for both small and large businesses. One of the most challenging struggles encountered by both large and small businesses is generating initial consumer interest. Many businesses are able to maintain repeat business from existing customers, but finding new customers can be extremely challenging. By offering discounted gift cards, customers can be introduced to a new retail store, service or restaurant at minimal cost to the company. Lots of money spent on print and media advertising results in a low response rate. When discounted gift cards are offered to consumers, the response rate can reach as high as 90%.
Small businesses can benefit significantly by advertising with discounted gift cards. Small businesses have limited resources for advertising, and marketing can be extremely expensive. The costs for print ads, television ads, and radio ads have skyrocketed over the past 10 years, with no signs of slowing down. Production costs for a television advertisement can run from $40,000 to several million, beyond the cost of many small businesses. Discount gift cards allow any business, quickly and easily, to bring in new customers at an affordable cost.