Why Are Gift Cards More Important Than Ever

At its core, a gift card is just a piece of plastic or a digital code that represents prepaid money. But psychologically, gift cards feel like so much more. They represent freedom of choice and simplicity on the giver's end. They convey the sentiment: "I want you to pick what you like."

The ability to customize an experience by choosing the retailer, and in the case of eGift cards, choosing the retailer instantly, increases the appeal of gift cards. Gift gards have become extremely commonplace, and the meant many people celebrate occasions like birthdays and holidays or use gictures to thank someone or to ease their minds when they have forgotten to buy a gift.

Most people now associate gift cards with shopping, and GMI Research indicates the Gift Card Market will reach $2,747.8 billion by 2030.

Initially, gift cards might seem like an unnecessary expense to consumers, but to businesses, they mean so much more. With gift cards, businesses have the ability to drive sales, customer loyalty, and increase brand identification, all via gift cards as an added benefit to purchasing a gift for someone.

With gift card sales, businesses do not need to worry about extra costs like inventory, storage, or shipping. When gift cards are backed by a solid gift card management system, the businesses are able to create a fully functioning gift card storefront online. Most of the time, gift cards require minimal to no manual oversight. Less admin required to manage the business = less room for human error, and less time wasted.

With gift cards, customers and businesses are both able to win. Businesses generate an immediate revenue stream, and consumers are able to get a gift card to a store at any location they desire. The best gift cards are those that require minimal time and effort to choose. The best gift card option are those that require minimal time and effort to select.

Gift cards have the unique ability to draw in new customers. When someone purchases a gift card from a business that they normally shop at, they are, in a way, promoting the business. This is an unbelievable case of word of mouth marketing. When the recipient of the gift card comes to the store, there is an increase in revenue for the business.

Once the recipient of the gift card comes to the store, they will be more likely to return, and their patronage will expand the customer base of the business.

Supporting community activities and charitable donations is also beneficial. Donating gift cards for fundraising activities elevates your brand's stature as a community supporter. Plus, people remember it.

Gift Cards as a Marketing Strategy

Have you ever seen your branded gift card in someone's wallet? Now, every time they open it, your logo and name company is displayed. That's a pocket advertisement for your business.

When someone buys a card, they become a brand ambassador. They're saying, “I trust this brand enough to recommend it to you.” That's strong endorsement and more powerful than most advertising, and very inexpensive.

Gift cards also help businesses gain repeat customers. Many businesses do something similar to this during holidays as a promotion. For example, they offer a bonus gift voucher to customers who buy a gift card.

It looks simple, but it’s very effective as customers feel like they have received a bonus and spend more without feeling obligated to do so. It also encourages customers to come back again to redeem the bonus, establishing a cycle of strong customer loyalty.

You can also use this tactic to build momentum during periods of slow sales by offering time-limited gift voucher bonuses. It’s a light nudge that has the power to change a lot.

Enhanced Cash Flow for Clients

This is something very useful. A business receives payment as soon as a consumer purchases a gift card. There is no waiting for the consumer to choose a gift card or for a product to be shipped or even for a consumer to pick up a product at a store.

In fact, customers may even end up not using the full amount on the gift card, meaning the actual cost the business incurs is even less. There is no risk of cash-on-delivery. The business receives payment immediately, and the consumer may or may not end up picking up a product. This is why a lot of businesses view the income as prepaid and cash flow as improved.

Emergence of Digital and eGift Cards

Physical eGift cards are not as common, and eGift cards are easily purchased. eGift cards are sent via email and no shipping, plastic, or delay are involved.

Consumers love the speed and simplicity of the eGift card and businesses love the costs savings. Digital gift vouchers are even more convenient whether redeemed online or in-person, and that is the reason for their increased popularity.

In the end, gift cards are more than a seasonal item. They are a long-term growth strategy that brings in new customers, boosts cash flow, increases customer retention, and enhances brand awareness. All of that from a simple idea.