How to Sell Gift Cards in Your Store

Gift cards are the perfect gift to sell, especially around the holiday season. Not only are they a powerful way to grow sales, but they can also help you achieve another marketing objective: brand awareness.

However, you can’t just put a stack of gift cards in your shop and expect them to take off without any extra effort on your part. You need to put a well thought out strategy in place too.

This post will help you come up with that strategy. We’ll cover everything from in-store promotions to creative ways to package your gift cards, and digital marketing tactics you can use to drive sales growth.

Are you ready? Let’s get started.

The Power of Gift Cards

There’s no doubt the demand for gift cards is out there. A 2016 survey from BlackHawk Network had 81 percent of respondents report that gift cards would account for up to half of the holiday gifts they would buy for others.

And it isn’t just adults buying gift cards for their peers. A 2015 survey on gift cards and holiday shopping for kids yielded 80 percent of respondents reporting that they were likely to buy at least one gift card for a child.

You’ve probably seen this trend in your own recent gift-giving and gift-receiving experiences. How many gift cards did you receive last year? How many did you give to others? We’re willing to bet it was at least a few. And for good reason. This payment method is basically instant cash for use at your favorite business.

You’re not alone. The gift card market is simply enormous. In 2017, it was estimated by WalletHub, that the total amount spent on gift cards over the entire year would be $150 billion. An industry of that size isn’t something you have the luxury of ignoring.

Now that we’ve explored the popularity of gift cards, let’s take a closer look at the two benefits we mentioned earlier: brand awareness and sales growth.

A Few Benefits of Selling Gift Cards in Your Store

Brand awareness and sales growth are two major benefits of selling gift cards. Think about it. A customer of yours thinks so highly of your shop that they purchase a $100 gift card for a family member that has never been in your store. A few months later the gift card recipient comes in, uses their gift card and spends an additional $25. Not only did you generate more sales revenue (growth), but you also made a new customer (brand awareness). Another benefit is that there’s no transaction fee associated with gift cards like there is with a credit card payment. This makes gift card transactions more profitable for your business.

Brand Awareness
Building brand awareness is one of the toughest challenges that small businesses face, especially early in their existence. That hardship is backed up by data. The Small Business Association (SBA) says that one-third of new businesses won’t last their first two years. With this harsh reality looming, small business owners have to hit the ground running in order to succeed. One way to do it is by building brand awareness with prospective customers in your target market.

Most of the popular strategies used to build brand awareness require a sizeable financial investment and specialized marketing knowledge, making them all but impossible for a small business to execute. For example, advertising across multiple mediums (TV, billboard, radio, digital, etc.) at scale isn’t cheap or easy.

Gift cards are an exception to this rule. Producing gift cards is a relatively inexpensive and straightforward project. But how do they generate brand awareness? Since gift cards are primarily given as gifts to others, they allow your customers to introduce your brand to a new audience. When those folks come in to redeem their gift cards, give them an amazing shopping experience so they’re likely to come back again.

A survey from American Express found that 46 percent of respondents will tell an average of eight people about a positive service experience. Do you know what that means? That’s right, more free brand awareness.

A Boost in Sales
There are several ways selling gift cards can increase overall sales. They’re the perfect gift for an indecisive shopper. If someone comes into your business looking for a gift but isn’t sure what to buy, a gift card presents a safe option. Instead of walking out with nothing, they leave with a gift card, saving what would otherwise be a lost sale.

As of 2010, a study on gift card purchasing and usage found that 11 percent of the people shopping with gift cards were first-time shoppers at a given store. As we hinted at earlier, this is a great opportunity to turn a new customer into a repeat buyer. So, ensure that you and your team give these individuals the best possible experience in your business.

Lastly, CEB also found that people who are given gift cards will overspend the gift card amount by 38 percent on average. So, you can expect a sizeable revenue bump as people redeem their cards. This can help make up for a slow January and February when people are typically focused on paying down holiday debt and fulfilling New Year’s resolutions about financial responsibility.

SEE ALSO: 5 Inexpensive Ways to Maximize Retail Sales for the Holidays

How to Sell Gift Cards

By this point, there should be no doubt that selling gift cards can be good for your business and possibly even a priority, especially around the holidays. But as we said before, it isn’t as easy as just putting them out in your store and letting them sell themselves.

Here are a few proven strategies for both producing gift cards, and for helping you sell your gift cards.

Focus on Gift Card Design and Packaging
Most gift card providers allow you to create a custom design for your cards. Use this to your advantage. Create something unique and eye-catching. Not only will this help your gift cards stand out in-store, but if you create a physical card that’s enticing enough that people want to show it off to their friends, it will also help you generate more brand awareness. To double-down on this, use plastic gift cards, not something cheap like cardboard.

Similarly, think about how you package your gift cards. Sure, you might put them on a rack next to your cash register or point of sale (POS) system so they’re visible, but that’s just the first step. Think about the ways in which you can package your gift cards to make them more appealing to the recipient. For example, after purchase, you might package the cards in a pre-wrapped gift box, a custom-designed gift bag, or a nice envelope.

While this does require extra work and investment on your part, it’s this kind of extra touch that makes your gift cards more appealing, builds your brand, and strongly positions you against the competition. Think about how you’ve seen this strategy used in products you’ve purchased for yourself. For example, a new iPhone comes in an elegant package that serves to reinforce the premium nature of the phone. In fact, Steve Jobs believed in the importance of packaging so much that he actually patented the iPhone box. Take this lesson and get creative with it.

Not the creative type? Services like Fiverr or Upwork can help you connect with a skilled professional that can complete the project for you at a reasonable.

Use In-Store Signage to Your Advantage
There are a couple of best practices when it comes to persuading shoppers to buy gift cards. The first is that you want to display them prominently. In many cases, this means setting up a stand near your register or POS. However, if your business is large enough, you may want to set up several strategically located displays instead of just one.

The second is to use signage to your advantage. This could mean signs in your business promoting the gift cards to help drive shoppers to take action, or using signage outside your business to attract more foot traffic. In either case, you want to use language that clearly communicates the value of the gift cards that leads a customer to buy them. The signs should also be eye-catching so that they’re easy to spot.

The last big rule is to educate your staff. While some patrons will walk into your business and buy a gift card on their own, many won’t. Hence the importance of training your team on how and when to sell them.

For example, if a salesperson is failing to find something a shopper might like, you might have the salesperson suggest a gift card as a last-ditch effort to save the sale. Alternatively, you could position gift cards as an up-sell purchase. In this instance, you’d want to pitch them at the point of purchase. Up-selling can work particularly well if you discount the gift card purchase price. So, you might offer a $20 gift card for $15 and so on.

SEE ALSO: How to Increase Sales in Retail – The Ultimate Guide

Sell an Experience and Create a Campaign Around It
What’s more likely to result in a purchase: a standard, plastic card with a dollar amount on it or the promise of an experience with the purchase of a gift card? (FYI, it’s definitely the second one).

One approach is to sell your gift card as part of a package. Here are few quick options:

• If you run a spa, you could sell a package that includes a gift card plus a free 30-minute massage
• If you run a restaurant, you could package your gift card with two free seats at a chef’s table event
• If you run a retail boutique, you could package your gift with a free styling session

Another way to achieve a similar effect is to build a marketing campaign around the different ways that a customer can redeem their gift card. You could execute the campaign through multiple marketing channels like blog posts, email newsletters, and social media posts.

This can help the purchaser go from viewing gift cards as something you buy when you don’t know what to get someone, to see it as a more personal gift. If you run a retail store, you could put together a blog post detailing a new look for the New Year, or a restaurant could send an email promoting dishes that fit with a New Year’s resolution to eat healthier.

Regardless of the option you choose, ensure that your staff is aligned with the content and goals of the campaign. This ensures that if prospects enter your business enquiring about it, your staff knows how to sell it or answer questions appropriately.

Run Gift Card Promotions
Because of the power of human perception, even the slightest discount on a gift card can make it more appealing to potential patrons. For example, you could offer a $50 gift card for $45 in the week leading up to Christmas to turn those last-minute shoppers into buyers.

While that’s a simplistic example, you could make your promotions or sales more sophisticated if it makes sense for your target audience. For example, you can run a promotion stipulating that if a shopper spends more than $50 at your business, they automatically get a $10 gift card, or if a shopper buys two gift cards of any value, they can get a third of equal or lesser value for free.

Whatever the promotion you choose, it’s important to make your staff aware of it so they can sell it or explain it to a prospective buyer effectively. You’ll also want to do a deep dive into your analytics after the promotion ends. This will help you understand if it was a success or not and give you ideas for promotions you might run at other points of the year.

Market Gift Cards Across Multiple Channels
Brick and mortar store owners might initially shy away from using digital marketing tactics to promote their gift cards if they don’t sell virtual or eGift cards. This line of thinking can seriously hinder your ability to see a return on investment for your gift card endeavor.

For all the pros and cons of the internet, the one that neither side can deny is that it allows you to ‘cast a wider net.’ It helps you reach a far larger audience of prospects than you could if you relied on in-store marketing or local marketing alone. If you really want to make a splash and sell a serious number of gift cards, you need to execute a digital marketing strategy.

To help you get started, let’s look at a few ways you can use some of the more popular (and effective) digital marketing channels to your advantage.

Email Marketing
If you have a small business, it’s likely you also have an email marketing list that you’re sending at least the occasional promotional email to. Use this list to let your subscribers know about your gift card program. Here are some example emails you might send:

Sending a holiday gift guide with a selection of items from your store (your gift card could be one of these items) positions you as a helpful source of holiday information and gives customers the motivation to buy a gift card.

Think about it. Oftentimes the hardest part of gift-giving is deciding what you want to get someone. By providing that info, not only are you being helpful, but you’re making shopping easier. This increases the likelihood that a customer heads over to your store.

You could contain this guide within the body of an email, or link out to a blog post on your website. The second option is a little bit more efficient because you can also drive traffic to the post via social media. Your email could be standalone (meaning that the only thing the email talks about is the gift guide) or you could include the post as an item within one of your newsletters.

If you run a promotion around your gift cards, consider emailing about it. You might send out a series of emails leading up to a holiday like Christmas or Hanukkah that’s designed to create a sense of urgency around making a purchase. You would definitely want to mention gift cards throughout your email series and how they make the perfect gift for indecisive buyers and picky gift card recipients.

Social Media
Social media can make small business owners run for the hills because it seems like so much work. However, don’t lace up your sneakers just yet. You don’t have to market on Facebook and Twitter and Instagram and LinkedIn, etc. You just have to find one or two platforms that best allow you to reach your target audience and achieve your marketing goals.

It’s also important to tailor your gift card marketing content to the specific type of social media you’re using and the people you want to reach. For example, if you’re advertising a gift card on Instagram, you want to have high-quality photos of a visually pleasing gift card paired with products a shopper could purchase with the card.

SEE ALSO: The 8-Minute Guide to Ecommerce vs. Traditional Commerce

Selling Online with an Ecommerce Platform

If you’re in a position where your business has an online store, take advantage of that to sell more gift cards. The closer it gets to the gift-giving holidays, the more convenience people want. Gift cards fit that bill perfectly. One way to sell more gift cards is to create a special deal online that offers free shipping when making a purchase with a gift card. You could also offer a free gift card with a purchase over a certain value. You can also sell cards online by offering a virtual gift card or e-gift cards.

This can drive sales on both the initial and follow up purchase. You’re making money on the first transaction, and when the gift card is redeemed, there’s a strong chance the customer will spend more than the value of the card.

Don’t Put Restrictions on Gift Cards

Although federal law restricts retailers from putting an expiration date on gift cards or adding fees for periods of inactivity, businesses sometimes diminish the value of a card if it isn’t used after the first 12 months. This strategy isn’t recommended. Is it worth alienating customers who have unused gift cards by lowering their card balance if they don’t spend it within a year, just to reduce your gift card liabilities?
While you don’t want to put restrictions on redeeming the cards, you could write your return policy to stipulate that all returns are done in the form of store credit, which is another way to get gift cards in your shoppers’ hands.

Use a Point of Sale to Manage It All

To do gift cards right, you really want to have a POS system in place. Sure, you can sell gift cards if you use a traditional cash register, but the process becomes so much harder.

With a POS like ShopKeep, you can order custom gift cards, load them, track the performance, and handle sales all from one system. The best part (and biggest headache preventer) is that you can track your gift cards as liabilities until they’re redeemed, keeping your accounting accurate at all times.

It doesn’t get any easier, plus with the wealth of data that ShopKeep provides, you’ll be able to tweak and adjust your gift card program to ensure it’s a steady source of revenue for months to come.

The Bottom Line

Knowing how to sell gift cards in-store is a huge boost to growing your business, especially during the holiday months. The best part is, it isn’t hard to get started. If you’d like to learn more about how gift cards work with ShopKeep, head on over to our site and chat with one of our POS Specialists about getting started.

Ryan Gilmore

As Inbound Content Marketing Manager at ShopKeep, a leading iPad Point of Sale System, Ryan Gilmore uses his extensive experience in small business technology to create educational content that helps merchants run and grow their businesses more effectively.