Quote:
On 2005-08-27 08:59:00, HEARTLAND wrote:
Promotional Card Idea:
Run a ¡§Mystery Card¡¨ swipe-and-win campaign to drive more customers in the door for a sale or event. Simply pre-load a quantity of card with $$ of value, two card with a higher $$ value, and one card with a higher $$ (set the amounts to fit your type of business).
Then mail or distribute the cards with a promotional piece that invites customers to come into the location to discover how much their card is worth. Plastic cards loaded with value have been proven in the marketplace to generate significantly more response then paper discount coupons.
Gift cards mean a better sales experience for both you and your customer. But most importantly, they provide a real return on investment. A 2002 survey by the National Retail Federation found that gift cards were among the most popular of gifts, not far behind clothing and books/CDs. Customers are familiar with plastic, like using it, and purchase more with a gift card than with a paper certificate. In addition, over 60% of customers purchase more than the value on a card. A popular twist on the gift card concept is prepaid or stored value cards. With stored value cards, your customers pre-pay for multiple products or services in exchange for a discount. Got a marketing idea? Use cards to improve your results.
Interesting facts: Here are some additional ways that gift / stored value cards improve your bottom line.
1. Gift cards are becoming a first-choice gift ides. ¡VAmerican City Business Journals
2. 64% of consumers say they would like to receive a gift card as a gift. ¡VDeloitte-Touche
3. Gift Cards outsold paper gift certificates by $55 billion Vs $5 billion in 2004. ¡V National Retail Federation.
4. Prepayment advantage. A $100 gift certificate sale means $100 cash for your business today.
5. Products or services are delivered by you - well after payment is received.
6. Reduced labor and administrative costs.
7. Paper gift certificates are difficult to handle, process, and reconcile.
8. Gift cards are easily stored, issued, and tracked.
9. Transaction times are faster than any other exchange medium¡Kjust swipe the card to complete the purchase.
10. Reduced loss from theft and fraud.
11. Paper certificates are easily copied or altered. They are susceptible to theft, and must be kept secured, like cash.
12. Gift cards have no value until they are activated, have a unique ID number, and are not susceptible to duplication.
13. Breakage revenue. Studies show that the average customer leaves 15% of a gift card¡¦s value unredeemed, and gift card programs are typically set up to leave this value on the card.
14. Reduced loss from returns. When customer returns merchandise, you have the option of offering a refund in the form of a gift card, ensuring that the value of the return stays with your business.
15. Free advertising. Your company¡¦s logo and marketing message is printed on every gift card sold. This is a form of advertising that your customers carry in their wallet or purse every day. Plastic cards and associated in-store merchandising also provide advertising at your business.
Merchant Benefits of Plastic Gift Cards:
1. Increased
Income:
a. Gift Cards are often the most profitable square foot of selling space in the store
b. Merchants report sales increases of 25% TO 500% OVER paper gift certificates
c. Customers spend more with gift cards: 61% spend more then the value on the card.
2. Marketing Impact:
a. Cards improve brand awareness and function as small ¡§billboards¡¨ in customers¡¦ wallets
b. Cards consistently boost the effectiveness of marketing campaigns to attract new customers
c. A variety of Loyalty & Rewards programs give customers a reason to keep coming back
3. Management Tools:
a. Cards may be used to issue store credit for all merchandise returns-keep cash in store.
b. Detailed reporting reduces fraud & eliminates burdensome manual accounting tasks.
Retailers reap huge profits from gift cards: Home Depot reports $43 million in
income from unused balances
By Lisa R. Schoolcraft, Atlanta Business Chronicle
Updated: 2:33 p.m. ET June 13, 2005
The huge profitability of gift cards to American retailers became clearer than ever June 2, when The Home Depot Inc. said it has taken in $43 million in
income from gift cards that are unlikely to be redeemed. The nation's No. 2 retailer recognized the gain from gift card "breakage" for the first time ever, in a quarterly filing with the Securities and Exchange Commission. Breakage is the balance remaining on gift cards that a retailer can claim when the cards expire, are lost or are unused for a lengthy period. An estimated $55 billion worth of gift cards were sold in 2004, according to John Gould, director of bank cards at TowerGroup, a financial services consulting group outside of Boston. About 10 percent of the value of gift cards sold in the United States goes unused, as consumers "put them in their back pockets and forget about them," Gould said.
Paper¡¦s Out! Plastic¡¦s In! The switch to Plastic Loyalty/Gift Cards is on!
Did you know?
„« Plastic Gift Cards outsell paper gift certificates by 200-400%.
„« A year ago only 15% of North Americans had heard of Gift Cards. Now, more than 80% of North Americans know about them. Clothing stores, hardware stores, bookstores, and even Starbucks, sell Gift Cards.
„« How can plastic cards be used?
„« Gift Cards can be sold to your customers to give as gifts for friends and family to use only in your store(s).
„« Loyalty Cards can be used to keep track of your customers' purchases and award them points to use for "free " or other rewards.
„« How do plastic cards increase your revenues and profits?
„« Increased store traffic ¡V Attracts new customers and generates repeat traffic with loyalty incentives. 55% of cardholders make more than one trip to your store to use up the card's value. This number should be even higher in stores, with low average transaction size compared to other retailers.
„« Generates higher ticket sales - 58% of gift card receivers spend more than original value of the card ¡§Customers see the gift card as a discount and on average spend 40 percent more than the gift card says.¡¨
„« Increase profit margin ¡V Gift card users tend to pay full price more often and make larger purchases than customers who use other payment methods. Forty percent of customers using a gift card purchase items at full price, compared to 16% of shoppers using other payment methods.
„« Improve cash flow ¡V When a card is sold or recharged, you keep the cash until the card is used to purchase goods and services. By issuing refunds to an electronic gift card rather than issuing cash or credit card refunds, you can ensure that the customer will spend it in your store. Also, since any unspent balance remains on the card, there is no need to issue change for unspent amounts.
„« "Breakage" - Many customers will not use every cent on their electronic card. "Breakage" is the unused balance on each card, which traditionally ranges from 10 to 20%. In other words, for every $15 Gift Card that you sell, $2.25 will never redeemed and (in most provinces) falls directly to your bottom line!
„« Inventory Shrink ¡V Electronic gift cards only have a cash value after they are "initialized" at the time of purchase. Therefore, stolen gift cards (not yet initialized) have no value and cannot be used! (Stolen "paper" gift certificates represent lost revenues!)
Save Money & Eliminate Losses
„« Eliminate Fraud ¡V Eliminate the possibility of counterfeiting which exists with paper gift certificates.
„« Stop Theft ¡V Eliminate employee or customer pilferage, since electronic cards hold no value until activated, and all transactions are electronically tracked.
„« Reduce administrative costs ¡V Paper gift certificate administrative costs run as high as 8% of total gift certificate sales.5 Gift cards reduce this cost by as much as 90%. Since transactions can be tracked electronically, gift card transactions are more accurate than paper-based gift programs.
Convenient for Merchants
„« Easy to issue & redeem electronic cards ¡V All transactions handled by credit card processing terminal, quickly and easily.
„« Easy to track ¡V All transactions are electronically tracked, with detailed monthly statements.
„« More flexible than paper certificates ¡V One card can contain cash value AND loyalty points, with redemption program custom designed to fit your business.
Convenient for Customers
„« Easy to carry and redeem ¡V Fits perfectly in a wallet
„« Easy solution - Great gift for the hard-to-shop-for friend or relative
Enhanced Advertising
„« Differentiation ¡V Improves your company Image. Sets you apart from your competition by offering your own gift and loyalty program, instead of the old gift certificates and punch cards
„« Branding opportunity ¡V Keeps your business on your customers¡¦ mind with custom printed gift/loyalty Cards, which act a ¡§your billboard in their billfold.¡¨
„« Capture Customer Profile and Track Purchase Behavior ¡V the data capture capabilities of electronic cards can refine marketing efforts.
Fantastic idea. You have a gift for marketing, and I mean that. Good luck.