If you are a small business, then gift card programs can be a great way to increase revenue and bring in new customers. In this comprehensive guide, we will walk you through everything you need to know about gift card programs so you can start boosting sales with a gift card program!
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The Value of Gift Cards for Small Businesses
Gift cards are one of the most popular gift options available, and they can be an effective way to generate more sales and draw in new customers. Gift cards provide convenience for gift-givers because it gives them a range of choices for what to purchase with their gift card amount. They also give businesses a way to attract new customers and make existing ones happy.
Some high-level benefits of a gift card program include:
- Increased Revenue
- Customer Loyalty
- Customer Retention
- Attract New customers
Types of Gift Cards for Your Business
The two main types of gift cards are physical gift cards and digital or e-gift (electronic gift) cards.
Physical gift cards are plastic cards with a magnetic strip or chip that can be used as payment at the store. Gift certificates are similar to gift cards, but are printed on paper and can only be used at the store that issued them.
Digital gift cards or e-gift cards are stored in a digital wallet or app and can be easily purchased online and sent as an email or directly to your mobile device through text. Gift codes come in the form of small numbers or letters and are redeemed for gift card amounts by entering the gift code at checkout.
The Different Gift Card Systems to Consider
There are four common gift card systems for your business to consider when developing a gift card program. These four systems are an open-loop system, a restricted open-loop system, a closed-loop system, and an unrestricted open-loop system.
Open-loop systems are operated by third parties and offer gift cards that can be used at multiple stores or brands. Restricted open-loop gift cards are gift cards that can be used at multiple stores within a single brand. Closed-loop gift cards are gift cards that can only be used at one store or brand. Unrestricted open-loop gift cards allow customers to use them anywhere in the world, regardless of the store or company they are purchased from.
Setting Up Your Business’s Gift Card Program
Once you decide which gift card option is best for your business, the next step is setting up your gift card program. Here are some steps to help you get started:
1 Research Gift Card Laws
Make sure that you are familiar with gift card laws in your state or region. Many states regulate gift cards and require businesses to follow certain rules.
2 Determine Your Gift Card Policy
Set up a gift card policy that includes how gift cards are sold and redeemed, customer service issues, expiration dates, and other pertinent information. It is crucial to list this policy somewhere on your website where users can easily find it. You should also educate all employees on your business’s gift card policy to ensure consistency.
3 Select Your Gift Card Provider
Choose a gift card provider that can meet your needs and budget. Research the different gift card providers to find one that offers services tailored to your business’s unique needs and goals.
4 Integrate Gift Card Functionality into Your POS System
Once you choose a gift card provider, they can help you integrate gift card functionality into your Point of Sale system, if your system doesn’t already have the functionality. This will allow customers to easily redeem their gift card at your business for a positive customer experience and smooth business operations.
5 Promote Your Gift Card Program
Now that you have successfully set up a gift card program for your business, it’s time to let customers know about it. Leverage social media, email marketing campaigns, and in-store promotions to spread the word and get gift cards into the hands of customers.
6 Add Gift Card Functionality to Your Website or Mobile App (If Applicable)
If your business has a website or mobile app, make sure gift card purchase and redemption functionality are included. This will provide customers with an easy and convenient way to purchase gift cards and redeem them for goods or services at your store or online for a better customer experience.
7 Start selling your gift cards
Now that you’ve done all the necessary setup work, it’s time to start selling gift cards. Make sure gift cards are easily accessible and visible on your website or in-store to encourage customers to purchase them.
How to Set Up and Order Physical Gift Cards
If you are offering physical gift cards, then you will need to know the process of ordering them. Here is a step-by-step guide on how to order physical cards.
Step 1 Choosing the Right Type of Physical Card
The first step is to decide what type of gift card you want to offer. Consider the size, shape, design, and other features that will best fit your business.
The two main types of physical gift cards are barcode models and magnetic strip gift cards. Barcode gift cards are the least expensive so they are highly favored by smaller businesses, but if you have a larger budget and plan to track your gift card program’s performance, a magnetic strip card is a more favorable choice.
As far as material goes, plastic is the most common choice for businesses of all sizes and industries because they are more durable than paper gift certificates. Metal cards are another option, but they are much more pricey.
Step 2 Choosing the Right Supplier and Gift Card Designer
Once you have chosen the right gift card type and material for your business, it’s time to place an order with a supplier. Many suppliers will provide design services for your business, but if you have an in-house designer, then you can also send your own artwork to almost any gift card vendor.
If you don’t have a graphic designer, do some research on the design services that a few gift card suppliers offer to make sure they can meet your expectations. You should also consider the price and quantity that you plan to order when consulting with different vendors.
Many vendors offer lowered prices if you buy in bulk and some vendors will match another supplier’s price if you ask them to, so always go with the business partner that meets all of your expectations, rather than just the cheapest option. It will pay off significantly later on.
Some gift card suppliers to check out are:
Always factor in shipping costs and the time it will take to design, print, and ship the product.
Step 3 Ordering Your Physical Gift Cards
Once you have chosen your gift card supplier, you will need to place an order. Keep in mind that gift cards are usually shipped within two weeks of ordering, so make sure that you plan accordingly and leave enough time for the gift cards to arrive before you start offering them to customers.
When placing your order, be sure to specify the quantity, gift card design, gift card type (barcode or magnetic strip), gift card material, and any additional features you might want.
You should also develop an operational plan for reordering gift cards in bulk every quarter or a couple of months to meet your new demand.
Step 4 Processing Gift Card Transactions
Now that you have chosen a gift card supplier and designed your gift cards, you need to decide how you will process gift card transactions in your business. This can be done manually or through gift card software. If you choose to manually process gift card transactions, then you will need to record someone’s gift card number every time they make a purchase using that gift card.
On the other hand, if you opt for gift card software that integrates with your POS system, your customers will be able to easily enter their gift card numbers into a terminal or gift card kiosk, enabling the system to automatically track gift card balances and transactions. This is a much more efficient system that will save you time and money down the line.
How to Create a Digital Gift Card Program
Digital gift cards have become increasingly popular in recent years and offer businesses a great way to extend gift card programs without needing physical gift cards. Digital gift cards are also better for the environment because they produce less waste and they are more cost-effective.
Digital gift cards are easily distributed, tracked, and managed in comparison to physical gift cards. These programs allow customers to purchase gift cards from any device and redeem them quickly with minimal effort. Additionally, you can customize your digital gift cards with special offers or promotions to drive more sales.
There are a few different ways to start offering digital gift cards. You can purchase gift card software, have an in-house team create a custom gift card program, or work with your gift card partner to set up a digital gift card program.
Gift Card Software
If you don’t have the resources to create a gift card program from scratch, there are many gift card software options available on the market. There are many gift card software solutions available on the market that allow you to quickly set up and manage digital gift card programs. These solutions typically include features such as gift card tracking, automated gift card email delivery, gift card redemption tracking, gift card expiration notifications, and more.
Creating an In-House Digital Gift Card Program
If you have the resources and expertise, creating a gift card program from scratch can be a great way to customize your gift card experience and offer customers unique features that are tailored to your business.
Get started by working with your IT and design team, or by hiring in-house gift card specialists to develop the strategy and program for your business. Although you have more control over this option, it is generally much pricier and takes considerably longer to launch due to its start-up status.
Hiring a Digital Gift Card Partner
Working with a gift card partner is the most efficient and cost-effective way to develop a digital gift card program. Gift card partners have already built gift card platforms that are ready for businesses to use, so it’s much faster than creating an in-house gift card program from scratch.
Plus, gift card partners often have gift card management tools and customer support to help you get set up quickly, so you don’t need to worry about the technical aspects.
By offering gift cards, you can increase brand loyalty and bring in new customers. With this comprehensive guide to gift card programs for small businesses, you’ll be able to easily identify which gift card program is the best fit for your business and get started creating gift cards in no time.
DigitalGift powered by apocket is the all-in-one digital gift card solution for your business. We empower your business to customize and distribute digital gift cards in a more efficient and cost effective way and to sell your digital gift cards beside national brands. Users can also easily store their digital gift cards in our mobile wallet on any of their smart devices and redeem right from the app!
Creating a successful gift card program doesn’t have to be hard, you just need the right partner. Contact Us today to learn more about how you can start offering digital gift cards with DigitalGift.
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