3 Simple Tips for Making the Most of Your Gift Cards

Introduction

Gift cards can be a great option for friends and family when it comes to holidays, birthdays, and special occasions. Gift cards provide the recipient with the freedom to choose exactly what they like, making them the perfect present for those impossible-to-buy-for people. In addition to being convenient, gift cards can also be a great way to reward employees or encourage customers to visit a particular store.

Benefits of Gift Cards

Gift cards come with a number of potential advantages, both for the customer and the business.

Customers

For customers, gift cards come with a number of benefits, such as:

They are easy to use - Gift cards are typically accepted at a wide variety of locations, and can be easily used for online purchases.

They offer a flexible spending option - Recipients can choose exactly how and when to use their gift card.

They provide an element of surprise - Rather than having to worry about finding the perfect gift, the recipient can choose something they're sure to enjoy.

Businesses

Gift cards can also be a great way for businesses to encourage customers to return. Here are a few of the potential benefits for businesses:

They increase brand recognition - Gift cards give businesses an easy way to market their brand.

They increase customer loyalty - By offering a reward for customers who visit the store, businesses can increase customer loyalty.

They boost sales - Customers are more likely to make additional purchases if they're using a gift card, as they won't feel as limited by their budget.

How Gift Cards Work

Gift cards typically work by containing an amount of money that the recipient can then use to purchase items in store or online. When the recipient makes a purchase, the amount of the purchase is immediately deducted from the balance on the card.

Many gift cards also come with expiration dates, and if not used by the specified date, the remaining balance on the card is forfeited. Additionally, most gift cards come with fees that are taken out of the remaining balance on the card, such as purchase fees, reload fees, and dormancy fees.

Types of Gift Cards

There are a variety of different gift cards that customers can choose from. Here are some of the most popular options:

Retailer gift cards - These are simply gift cards for specific stores, and offer the recipient the freedom to purchase whatever they please within that specific store.

Prepaid debit cards - These cards can be used anywhere that accepts debit card payments, and come with a variety of helpful features, such as online banking and fraud protection.

eGift cards - Unlike physical gift cards, eGift cards are sent via email, and can be used for online purchases.

Pros and Cons of Gift Cards

Gift cards can be a great way for businesses to increase sales and loyalty, and for customers to pick a unique present for their friends and family. However, there are also a few potential downsides to gift cards worth considering.

Pros

Convenient - Gift cards can be used at stores, online, and for a wide variety of items.

Flexible - Recipients are able to choose exactly what they want with the gift card, and not be limited to pre-selected items.

Personal - Gift cards are a great way to show someone you're thinking of them, as it's a personal way to offer a convenient present.

Cons

Dormancy fees - Some gift cards charge dormancy fees for cards that haven't been used within a certain timeframe.

Expiration dates - Some cards come with expiration dates, and if not used within the specified timeframe, the remaining balance is forfeited.

Fraud - Gift cards are not typically covered by fraud protection, so customers need to be extra vigilant when using them online.

Case Studies

Starbucks

Starbucks is one of the world's largest coffee companies, and their gift cards have been an integral part of their success. In addition to offering customers the convenience of the Starbucks app, they also offer physical and eGift cards that can be used in store and online. Customers are also able to create custom eGift cards with their own images and messages.

By offering customers the ability to purchase and send gift cards, Starbucks has been able to increase customer loyalty and brand recognition, and boost sales.

Amazon

Amazon is the world's largest online retailer, and they offer physical and eGift cards that can be used for purchases from their website. Customers can also customize their cards with messages and images, as well as ship the cards directly to friends and family.

The availability of Amazon gift cards has been a key factor in their success, as it's been a great way for customers to purchase useful items for friends and family. This has also been a great way for Amazon to increase customer loyalty and boost sales.

Best Practices for Gift Cards

Gift cards can be a great way to reward customers and encourage them to return to a store or website. Here are a few best practices for businesses that offer gift cards:

Offer discounts - Offering discounts on gift cards can be a great way to encourage customers to purchase them in store or online.

Keep fees low - Avoiding high fees is a great way to ensure that customers are really getting the best value from their gift cards.

Offer custom cards - Giving customers the option to customize cards with their own images and messages can help to make the cards more personal.

Conclusion

Gift cards can be a great way for customers to show friends and family they're thinking of them, and for businesses to increase sales and loyalty. Gift cards come with a number of potential advantages, including convenience, flexibility and personalization, but customers should be aware of the potential drawbacks, such as dormancy fees and expiration dates. Ultimately, though, gift cards are a great way to ensure that everyone gets something they'll enjoy.