Buying gift cards is not a casual consumer purchase. The stats show that in 2008 Americans bought more than six cards (on average), spending an average of $52 per card.
Even better for entrepreneurs is the fact that, according to Contardi, there is generally a "15 to 30 percent uptick" in what Contardi calls the "basket ring" (amount purchased) when consumers shop with their gift cards. In fact, the survey reported that 69 percent of gift card recipients spent more than the value of the card when they shopped.
This sounds like an excellent idea, but I offered gift cards one year and don't know that I want to offer them again. Granted, I did make quite a bit on the gift card sales, much of which was never redeemed. This really ate at my conscience. To top it off, two or three years later, I was still getting random calls from people who wanted to redeem the old gift cards... usually at times when it was a financial strain for me to honor the cards.
If you are thinking about offering gift cards, I urge you to do the following:
- Put an expiration date on the gift card. A small business should be comfortable putting a one year expiration date on the card. I would do 18 months at the most.
- Put a portion of the gift card income in a separate account to use when people want to redeem the cards.
- Get over the guilt of making easy money for unredeemed cards.
2 comments:
Where would a business OBTAIN gift cards to sell? I sell gift certificates for my pencil portrait art, and it is a great thing for my customers for a last-minute gift, or when they don't have the art reference photo but they want to give someone a portrait as a gift.
The article (link) tells more about how to get them, but I am sure certificates will work just as well for small businesses
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