Jan 24, 2011

How Gift Cards Help Your Small Business Grow

[caption id="attachment_393" align="alignright" width="300" caption="Gift Cards"]

[/caption] As the Los Angeles Times put it, gift cards aren’t just for the big boys anymore. Small businesses are reaping the benefits as well. However, according to the Los Angeles Times article, only about 8 to 10 percent of small and mid-size merchants have used them. For the remaining 90 to 92 percent who haven’t used gift card programs, here are four reasons why their businesses would benefit from implementing gift card programs. It Increases Spending According to industry research, consumers are likely to spend more than the initial value of the gift cards they received, and a majority of merchants who implement gift card programs report increases in their sales. To top that off, gift card users are more likely to buy full-priced items over sale items, and they are less likely to bring items back for exchanges or refunds. It Builds Brand Recognition The benefits here are twofold. First, someone has vouched for your business by giving your gift card to someone else—probably to a friend or family member. We all understand the power that word of mouth has to create trust and awareness, and a branded gift card does so tangibly and overtly. Just as importantly, a gift card serves as a reminder, like an advertisement that burns inside a wallet or purse. Depending on the value of the card, an individual may keep it with her for days or weeks. Think about the last time you needed something that you already had a gift card for, whether it was dinner or an oil change. It’s a win for you and your customers. It Generates Repeat Business Your gift card users are not only more likely to spend more money at your establishment, but they’re also more likely to visit your business more than once. Who wouldn’t want to increase repeat business? It’s Cost Effective Believe it or not, gift cards are incredibly affordable, which is why they’re becoming increasingly popular among small-business owners. And even better—we can help you. If you own a U.S.-based business and you’re interested in learning more, email us at info@newtekone.com—and be sure to ask us how you get can get your first 100 gift cards free.