Want to make sure you’re selling what customers want to buy this holiday season? The answer is simple: Offer gift cards.
According to the National Retail Federation, 81 percent of consumers surveyed said they plan to purchase at least one gift card during the 2013 holiday season. This year, average gift-card spending is expected to reach $163.16 per shopper, reaching a total all-time high of $29.8 billion for the entire U.S. market.
So, how can your small business tap into that market? Here are three tips for getting started with gift cards.
1. Pay attention to gift card laws. Before you start offering gift cards, make sure you understand the legal ramifications. Federal law requires that gift cards must be valid for at least five years. In some states, you may claim the cash value of unused cards after that term expires; in others, you must report the unused cards as “unclaimed property” that must be surrendered to the state through the escheatment process. For a primer, ScripSmart offers an overview of gift-card laws by state.
2. Research the best type of gift card to offer. Companies such as Valutec and First Data offer custom branded gift cards, as does Intuit’s QuickBooks Point of Sale. Or you could offer a pre-paid credit card, such as a VISA-branded incentive card. Digital gift cards may be a good option for online businesses; companies like CashStar and InComm offer digital solutions. You could also manage your gift card program internally by keeping track of a customer’s store credit on your own point-of-sale system (just make sure that you are managing your bookkeeping well).
3. Market your gift cards. If you’re running a gift card program during the holidays, let customers know about it immediately. If you publish an email newsletter, alert subscribers to your gift card options, providing clear details about how to buy them. Display branded gift cards prominently in your store(s). Create a banner ad and a dedicated landing page that promote your digital gift card offering on your website. Customers are doing their holiday shopping now: Make sure they know about the gift card options you provide.