7 Reasons to Accept or Offer Gift Cards For Your Business

Did you know that around 93 percent of American consumers have either given or sent a gift card? And, the total volume of gift cards is projected to surpass $160 billion by 2018?

In short, consumers love gift cards. If you’re not issuing and accepting gift cards at your business, then you could very well be undermining your long-term success.

Still not convinced? Then here are the main reasons why your business needs to start accepting offering gift cards.

Increases traffic

1. Increases traffic.

Make no mistake about it, gift cards will bring in more customers to your business. For every one gift card that sell sell results in at least two customers – the individual who purchased the card and the recipient.

Additionally, First Data discovered that more than 10 percent of gift card recipients had never (or rarely) visited a merchant’s location before receiving a gift card. This is definitely more powerful than “word-of-mouth” advertising since your most loyal customers are actually paying you money to gain new business.

Generates more revenue

2. Generates more revenue.

Besides increasing traffic, customers who use gift cards aren’t as price sensitive. They actually consider gift cards as free money or a discount, which means that they’ll spend more than the value of the card when redeeming the card. In fact, two out of three consumers who pay with a gift card will spend 38 percent more than the gift card’s value.

3. Besides relationships.

If you offer a well-designed gift card program, such as one where gift cards can be reloadable, you have the ability to gather contact information and track the purchasing behavior of your customers. With access to these types of analytics you improve your marketing efforts, boost future sales, and build relationships by keeping in-touch with the customers who have purchased or used gift cards.

If you offer electronic gift cards, you can connect with gift givers and receivers through multiple touch-points. For example, recipients will have to visit your site to activate the gift card, check their balance, shop, reload the card, check out your other products, and receive newsletters. You could also tie your gift cards to a loyalty program so that you can reward customers for verry visit, purchase and, reload.

4. Decreases returned merchandise.

Processing returns can be both time consuming, and expensive, since this involves restocking inventory and determining how funds will be credited back to the customers, which can result in chargebacks. Since customers can select their merchandise you’re reducing the amount of returns and the high cost of managing them.

5. Gives you cash upfront.

Instead of waiting to make a sale, whenever a gift card is purchased or reloaded, that cash is yours until the card is redeemed. This upfront money can be used to handle expenses like payroll, inventory, rent, or utilities. In some states, you may actually be able to keep those funds on cards that have not been redeemed.

Helps you compete with other businesses

6. Helps you compete with other businesses.

People enjoy gift cards because of the convenience. Larger, national chains have long-realized this. That’s why you can walk into a 24/7 convenience store and purchase a gift to Amazon, Olive Garden, or AMC.

Even though those aren’t unique, they’re perfect for last-minute shopping, or the times when you forget to purchase a gift. In order to compete with these businesses, your local business also need to offer gift cards – and not those certificates that customers have to ask for. Have gift cards clearly visible both in-store and your website.

Reduces fraud

7. Reduces fraud.

Security is a major concern for customers. And, it should be one of your business’s top priorities. While there are definitely cases of fraud, gift cards can reduce the amount of fraudulent activity since you don’t have to worry about things like a cardholder’s information being stolen or someone duplicating a paper gift certificate.

What if a customer’s uses a credit card to purchase gift cards? Some retailers will only accept cash or debit cards for gift card purchases. Others put a cap on the dollar amount or quantity that an individual can purchase at one time.


Best known as an Entrepreneur and Connector. John was recently named #2 on Top 50 Online Influencers in the World by Entrepreneur Magazine as well as a blogging expert by Forbes. He is the Founder and CEO of Due.

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