The holidays are starting early in 2020. This season, more shoppers than ever are expected to buy gift cards for family and friends, and retailers are taking every advantage they can find to ensure successful vacation campaigns, such as Black Fridays in October. Big names like Amazon and Walmart have announced plans for significant discounts on multiple dates throughout the holiday shopping season.
Gift cards continue to gain in popularity among consumers and merchants. A report issued by Trade and Research forecasts that the U.S. gift card marketplace will realize a compound annual growth rate (CAGR) of 9.2 percent between 2020 and 2024. This expansion builds on the CAGR of 11.7 percent listed by gift cards between 2015 and 2019. Overall value of U.S. gift card sales is predicted to reach $221 billion annually by 2024, according to the report.
As people adapt their vacation plans to adapt public-safety limitations, gift cards offer a secure and convenient way for shoppers to check off all of the names in their lists. Retail gift card point of sale supplies a range of benefits for customers and shop owners alike.
How Gift Cards Benefit Retailers
Financial services company FIS Global lists seven ways that retailers gain by providing their clients gift cards:
- Build brand recognition.
- Increase the shop’s holiday sales.
- Engage customers (those purchasing the cards and people receiving them).
- Collect valuable customer information.
- Make providing safe and suitable for clients and retail employees alike.
- Easy supply without taking up much screen space.
- Generate revenue for the shop before it really provides any service or product.
Gift cards create more revenue for retailers than their face value; a survey by First Data decided that consumers spend an average of $59 greater than the initial value of the gift cards they get . For supermarket gift cards, the average increased spending is 94 percent.
The cards also serve to extend the holiday season for retailers, permitting them to increase foot traffic in their stores well into the new year. The Hustle reports that clients are 2.5 times more likely to pay full price for things when they use gift cards to buy them.
How Retailers Can Maximize the Benefits of Gift Cards
The gift cards offered by retailers are known as “closed-loop” cards since they can only be bought and used at that organization. By comparison, open-loop gift cards, such as those offered to vendors by Visa or MasterCard, can be used at multiple locations.
Two gift card options are most popular among retailers:
- Online e-gift cards may be used to buy items in the shop or site or app; the POS system treats it the same as any other transaction.
- Physical cards feature a magnetic strip or barcode and are accessible from the merchant’s POS supplier, a merchant bank, or a third party vendor.
For Instance, ConnectPOS supports three types of cards:
- Fanfare for Elavon clients from the U.S.
- Synergy for non-Elavon clients from the U.S.
- ConnectPOS for non-Elavon clients from the U.S. and EU/UK
Instructions for printing and ordering physical ConnectPOS gift cards explain the steps of this procedure, including how to bring the corporation’s brand or customize the cards. ConnectPOS gift cards are also accepted for online orders. Customers have the ability to reuse gift cards, and gift cards can be used with loyalty cards to make a stronger bond with the client.
Strategies for Marketing and Tracking Gift Cards
Among the first steps when implementing gift cards to get a retail company is establishing gift card policies and ensuring employees know and abide by the policies. Store clerks will need to learn how the gift cards operate and any limitations which could be put on them, like a cap on the amount of cards which can be bought at the same time, rather than allowing gift cards to be used to purchase other gift cards. Federal rules limit gift card fees and expiration dates and countries place their own regulations on gift card fees, expiration dates, and redemption of unused parts of the card balance.
Reference 1.how-to-use-magento-pos-omnichannel-retail/ 2.best-magento-pos-system-2020/ 3.7-factors-third-party-logistics-provider-3pl/
Software Advice highlights three ways retailers can market their gift cards:
- Screen gift cards where clients are most likely to look at them, like checkouts and kiosks. In places that are not acceptable for showing the cards , add signals that remind clients of the availability of the shop’s gift cards. The promotions must extend to all marketing channels, such as online and traditional media.
- Give clients a reward for buying a gift card, like getting a free gift card when buying one of a specific price. An instance is a spa that provides clients a $20 voucher for each $100 gift card that they buy.
- Produce specialty gift cards for special events, and there is no event more special than the holidays. This holiday season particularly will benefit from all avenues available for dispersing our fantasies of joy and peace.
Offering custom gift cards is just one of the ways retailers can offer their customers options which produce their shopping experience more pleasurable. The cards serve as ambassadors to your shop’s brand, and they provide benefits beyond their face value. Retail stores will need to take advantage of all of the avenues available for generating revenue, and gift cards promise to be an increasing source of the revenue, this holiday season and beyond.
A point of sale partner like ConnectPOS can help you implement retail gift cards for the holidays this year. We work with you to apply an advanced POS solution that levels the playing area. Reach out to us now to find out more about how ConnectPOS can function as valued POS partner.
►►► ConnectPOS is a cloud-based POS software compatible with multiple platforms including Magento, Shopify & Shopify Plus, and BigCommerce.