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Gift Card Programs for Loyalty and Profit

For the seventh year in a row, gift cards are at the top of everyone’s gift list for

gift-giving occasions. According to the National Retail Federation’s 2013 holiday

survey published last October 60 percent of the consumers polled said they

prefer receiving gift cards that let them select their own gifts. Department stores

(40.3%) and restaurants (34.2%) are the most popular gift cards among

shoppers and recipients alike but coffee shops, electronics and online merchants

were well represented too.

This is excellent news for every type of retail outlet and it is incumbent on every

retail company to set up a gift card program to take advantage of this surge in

popularity. From pet salons to dry cleaners, gym, craft store or the specialty meat

market, gift cards can give your bottom line a boost. The statistics on long-

running gift card programs show that gift cards draw new customers to a store,

business or restaurant and the amount spent per customer rises as well.

Regardless of the denomination of the proffered gift card, the consumer nearly

always spends more than the face amount. Even if the sale rings up at less than

the amount of the card, the merchant is the all-around winner. If the tab is

greater, the merchant has sold more than the original amount; if the tab adds up

to less than the card’s value, the merchant gets to keep the money left over on

the card.

While some protest that gift cards are impersonal, their popularity is undeniable.

Rather than taking the easy way out, many gift-givers are looking for gift cards at

specialized stores that cater to their loved one’s unique interests.

Our society is so used to handling credit cards that it isn’t a great surprise that

plastic gift cards have more intrinsic value than paper certificates or even punch

cards. Plastic cards offer a myriad of benefits to consumers and retailers alike:

  •  Produce 30% to 50% more revenue per card

  •  Simple to track (retailer)

  •  Less likely to misplace or lose it (consumer)

  •  More convenient to carry in purses, wallets, pockets, backpacks, phone cases

  •  Sturdy, won’t rip, tear and the bar code remains scannable

  •  Another product or merchant branding opportunity

  •  Makes a good impulse buy item at the checkout

  •  Easy to use, add money or reload the card

For more information about gift cards and how they should figure into your

business, contact Mike Krause at 585-704-6453 or please visit

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