Gift card programs are a proven way to increase revenue, with the industry expected to surpass $700 billion by 2025. They also encourage customers to spend more – 65% of users spend an extra $59 on average beyond the card’s value. Here’s a quick checklist to get started:
- Upgrade Your POS System: Ensure it supports gift card transactions, real-time tracking, and online integration.
- Choose Card Types: Decide between physical and digital cards based on your audience’s preferences.
- Design Thoughtfully: Use your brand’s logo, colors, and seasonal themes to make cards appealing.
- Track Performance: Monitor sales, redemptions, and outstanding balances with detailed reports.
- Train Your Team: Teach staff how to activate, redeem, and handle gift cards securely.
- Promote Effectively: Highlight gift cards online, in-store, and during holidays with special offers.
Quick Comparison: Physical vs. Digital Gift Cards
| Feature | Physical Cards | Digital Cards |
|---|---|---|
| Delivery | Requires shipping | Instant delivery |
| Storage | Needs physical space | Works with mobile wallets |
| Security | Can be lost or damaged | Offers electronic backups |
| Environmental Impact | Uses physical materials | More eco-friendly |
| Customer Experience | Tangible and personal | Convenient and fast |
Bottom Line: A well-executed gift card program can drive revenue and customer loyalty. Start by setting up the right systems, training your team, and promoting your cards effectively.
7 Steps to Start Selling Gift Cards for a Local Business
Step 1: Check Your POS System Requirements
Make sure your POS system is equipped to handle gift card functions securely and efficiently.
Key Features Your POS Software Should Have
Your POS system must include these capabilities:
- Balance Management: Automatically load and adjust gift card balances.
- Payment Processing: Accept gift cards as a payment method without any issues.
- Online Integration: Allow digital gift card redemptions across different sales channels.
- Real-Time Tracking: Update balances instantly and monitor transactions as they happen.
- Reporting Tools: Provide detailed analytics for gift card sales and usage trends.
Once you’ve confirmed these features, check what updates might be needed to ensure your system can deliver them.
Necessary System Updates to Consider
To meet the requirements above, your POS system may need the following updates:
| Update Category | Requirements | Benefits |
|---|---|---|
| Software Integration | Compatibility with third-party gift card providers | Allows activation, balance checks, and redemptions. |
| Security Features | Tools for payment compliance and fraud prevention | Safeguards against fraudulent transactions. |
| Backend Systems | Real-time balance tracking and reporting | Makes reconciliation and monitoring easier. |
For example, a recent POS update successfully integrated multiple gift card providers, offering features like balance inquiries, reloads, and automatic cash-outs for low balances.
It’s also important to ensure your POS system supports various payment methods, has an intuitive interface, and provides dependable technical support. These factors will make managing gift cards smoother for both your team and your customers.
Step 2: Choose Gift Card Options
Once your POS system is ready, it’s time to decide on the best gift card options for your business.
Physical vs. Digital Cards
Preferences for gift card formats vary by generation. For example, 97% of Baby Boomers prefer physical cards, while younger generations lean toward digital options. In 2023, 70% of Millennials purchased physical cards, compared to 63% of Boomers and 61% of Gen Z shoppers.
Here’s a quick comparison to help you decide:
| Feature | Physical Cards | Digital Cards |
|---|---|---|
| Delivery | Requires shipping | Instant delivery |
| Storage | Needs physical space | Works with mobile wallets |
| Security | Can be lost or damaged | Offers electronic backups |
| Environmental Impact | Uses physical materials | More eco-conscious |
| Customer Experience | Tangible and personal | Convenient and easy to redeem |
Once you’ve selected the format, focus on creating a design that represents your brand.
Designing Your Gift Cards
Your gift card design should leave a lasting impression while reinforcing your brand. Rachel DeCavage, Owner and Creative Director at Cinder + Salt, highlights the appeal of gift cards:
"People love giving gift cards. It’s a no-brainer way for them to give someone something that they’re going to love."
Consider these design tips:
- Brand consistency: Use your logo, colors, and visual style to make the cards recognizable.
- Seasonal designs: Create themed cards for holidays and special occasions.
- High-quality materials: For physical cards, choose durable materials with a polished finish.
- Digital personalization: Allow customers to add custom messages or choose from a variety of templates for e-gift cards.
Finding the Right Supplier
Once your design is ready, choose a reliable supplier that can handle your gift card needs. As SVS Solutions notes:
"Make sure you choose a vendor you can really count on. After all, incentives are only effective if they’re delivered reliably, especially when recipients are looking forward to getting them."
Keep these factors in mind when selecting a supplier:
- Order fulfillment: Ensure the vendor can manage varying order sizes.
- Delivery speed: Quick turnaround is crucial, especially during busy seasons.
- Customer support: Look for responsive service and dedicated account managers.
- System compatibility: Confirm the supplier integrates smoothly with your POS system.
For digital cards, prioritize features like customizable templates and clear redemption instructions to cater to all users, including those less familiar with technology. For physical cards, consider offering registration options to protect against loss or theft, and explore eco-friendly materials to attract environmentally conscious shoppers.
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Step 3: Set Up Tracking Systems
Once your gift card options are ready, it’s time to establish tracking systems to monitor performance and ensure they work seamlessly with your store operations.
Add Balance Check Tools
Having real-time balance check tools makes it easier for customers to track their gift card usage, improving both efficiency and satisfaction. Here are some options to consider:
| Access Method | Features | Customer Benefit |
|---|---|---|
| POS Terminal | Live balance display, instant updates | Quick in-store verification |
| Web Portal | 24/7 access, transaction history | Convenient remote checking |
| Mobile App | Push notifications, wallet integration | Easy on-the-go monitoring |
| Phone System | Automated balance inquiry | Great for non-tech-savvy users |
These tools not only enhance customer experience but also provide accurate data for your reporting system.
Create Sales Reports
With the gift card industry expected to exceed $700 billion by 2025, tracking key metrics is crucial. Focus on these KPIs:
- Active Cards: The total number of cards currently in use.
- Sales Volume: The total value of gift cards issued.
- Redemption Rate: The percentage of gift cards redeemed.
- Outstanding Balances: Unused balances, which collectively amount to over $1 billion annually.
These reports will give you a clear picture of your program’s performance and help you make informed decisions.
Connect with Store Systems
To ensure smooth operations, integrate your tracking system with your store’s existing processes. Here’s how:
Accounting Integration
- Record gift card sales as deferred revenue until they’re redeemed.
- Track liabilities when cards are used.
- Monitor expired balances for accurate financial reporting.
Inventory Management
- Link gift card redemptions to stock levels.
- Identify popular items purchased with gift cards.
- Use sales trends to adjust inventory forecasts.
For instance, if a restaurant chain sells $100,000 in gift cards during December, integration ensures the amount is recorded as deferred revenue and recognized as revenue once cards are redeemed.
Stay on top of:
- Transaction amounts and remaining balances.
- Web-based reporting for authorized staff.
- Status updates (Active, Redeemed, Partial, Canceled, Transferred).
- Total amounts sold, redeemed, and unredeemed.
This integration streamlines operations and ensures your gift card program runs smoothly.
Step 4: Train Staff on Gift Cards
Once your gift card system is in place, it’s time to ensure your staff knows how to handle it effectively. Proper training will help streamline operations and maintain security.
Understand Card Procedures
Set up a training program that covers all the key tasks employees will handle, such as:
- Card Activation: Add balance through the POS system and issue a receipt.
- Balance Checks: Swipe or enter the card number, check the balance, and provide an updated receipt.
- Redemption: Process payments, update remaining balances, and print receipts.
- Online Orders: Handle digital codes, verify transactions, and ensure accuracy.
Make sure employees are comfortable using the POS terminal and understand the importance of issuing receipts for every transaction.
| Transaction Type | Actions | Details |
|---|---|---|
| Card Activation | Add balance via POS, issue receipt | Confirm payment method and amount |
| Balance Check | Swipe or input card number | Provide updated balance receipt |
| Redemption | Process payment, update balance | Print receipt showing remaining balance |
| Online Orders | Verify and process digital codes | Watch for suspicious activity |
Spot and Prevent Gift Card Fraud
Teach your team how to recognize and respond to signs of fraud. Common red flags include:
- Customers purchasing multiple high-value gift cards.
- Frequent requests to check balances on numerous cards.
- Unusual or non-standard payment methods.
- Customers who appear unusually stressed or pressured during the transaction.
Encourage staff to report suspicious behavior immediately and verify customer identities when necessary. Staying alert can significantly reduce fraud risks.
Provide Staff with Clear Guides
Develop easy-to-follow guides to help employees handle gift card transactions confidently. These guides should include:
- Step-by-step instructions for each type of transaction.
- Troubleshooting charts for common issues.
- Answers to frequently asked customer questions.
- Security protocols to protect against fraud.
Add visual aids, like diagrams of POS terminal operations and examples of receipts, to make the guides user-friendly. Keep these materials at every register and update them regularly as processes change.
With thorough training and accessible resources, your team will be well-prepared to manage gift cards efficiently as you move forward with promoting your program.
Step 5: Promote Your Gift Cards
With your team trained and systems ready, it’s time to focus on boosting gift card sales with smart promotion strategies.
Start Program Marketing
Make your gift cards impossible to miss. Display them prominently at checkout counters and create a dedicated landing page online to encourage impulse buys and digital engagement.
Use in-store displays, targeted email campaigns, social media posts, and even receipt advertising to spread the word and increase visibility.
Plan Holiday Promotions
Timing is everything when it comes to gift card sales. Schedule promotions around popular gift-giving occasions and align your efforts with peak shopping seasons. Here’s a quick guide:
| Holiday Season | Promotion Period | Suggested Actions |
|---|---|---|
| Winter Holidays | Nov 15 – Dec 31 | Add holiday-themed designs and bonus offers for purchases over $50. |
| Mother’s Day | Apr 15 – May 14 | Offer elegant packaging and themes like spa or beauty. |
| Graduation | May 1 – Jun 15 | Use designs featuring school colors or achievement themes. |
| Father’s Day | Jun 1 – Jun 20 | Focus on tech or sports-inspired designs. |
In addition to these promotions, consider offering exclusive incentives to encourage larger purchases.
Create Special Offers
Special deals can make your gift cards even more appealing. Here are a few ideas:
-
Bonus Value Programs: Reward customers with extra credit for hitting certain spending thresholds. For example:
- Buy a $100 gift card and get a $15 bonus card.
- Spend $200 on gift cards and receive a $30 bonus card.
- Bundle Deals: Collaborate with local businesses to create gift card packages. This not only attracts new customers but also strengthens community ties.
- E-Gift Cards: Highlight the convenience of digital gift cards, especially for last-minute shoppers. Emphasize features like instant delivery and customizable messages to make them stand out.
Conclusion: Gift Card Program Success Steps
Every step – from setting up systems to training staff – plays a key role in running a successful gift card program. In 2022, gift cards brought in nearly $500 million in revenue in the U.S. market, proving they’re an important revenue source for businesses of all sizes.
"For small retailers, gift card programs can really be a low-maintenance and affordable way to compete against larger stores, while also helping to acquire new customers and encourage repeat foot traffic".
Here’s a quick breakdown of the most important elements to focus on:
System Setup and Integration
- Make sure your POS system is configured properly, includes tracking tools, and processes payments securely.
Card Program Management
- Offer both physical and digital gift card options.
- Refresh card designs annually.
- Include appealing packaging to boost sales.
Staff Training and Operations
- Train your team thoroughly on selling and processing gift cards.
- Follow strict security measures.
- Create a clear set of operating procedures.
Studies show that customers with gift cards often spend more than the card’s value, making these programs a smart way to drive growth. Managing your program well can boost seasonal sales while building stronger customer connections.