Due to the growing popularity of this form of a gift among Poles, an issue of a Gift Card is a marketing communication tool increasingly utilised by well known brands. In comparison with 2011, there has been an increase of 44% in the number of people who either presented or received a gift card (source: Gift Cards in Poland in 2015 a Market Research ordered by PSEKP [Polish Association of Gift Card Issuers], in May 2015 and executed by PBS).
A gift card is not only a very practical present that is a brand card reflecting company image but also an increasingly popular form of handling goods returned by a customer.
The key benefits emerging from being a Gift Card Issuer have been presented below.
1. Sales increase
A gift card is a convenient gift for many Customers who find choosing the right item for a present in your shop problematic. Have you ever wondered how many clients left your shop without a present because they could not decide on the colour, the size or the kind of product they wanted to buy?
With a gift card, you will increase their interest in looking for the right item to buy from your assortment, you will persuade them to order an item from your offer that may not be on a shelf at the moment. At the era of the increasingly common multichannel sales you may invite your customer to your website or send a selected product directly to the client. The point is for the client to buy a product from you.
2. Improved financial liquidity
A person buying a gift card leaves cash with you and does not take any goods. This is only the recipient of the card who comes to redeem it in a few days, weeks or months. Therefore, a gift card is a credit bearing no interest that you received from you client.
GiftPlus, the solution offered by Argo Card for the handling of gift cards, makes it possible to manage such resources in case of a network having the structure of a soft franchise. The cash left in a company at the moment of issuing a gift card remains in the company until the card is redeemed either in this or another company. Only then the mutual settlement takes place. It should be remembered, though, that the mechanism goes both ways and a card issued here may be redeemed elsewhere. Statistics are undeniable.
3. Cash equivalent at the return of goods
The reason behind trade chains becoming issuers of gift cards is that customers expect the possibility of returning the goods after a few or after several days which is becoming a standard in the present trend of the retail market.
The return of goods, however, does not have to mean the loss of a sale opportunity or a decrease in turnover. A gift card is an efficient solution that, in this instance, serves the purpose of handling a return of goods. With the currently available systems of gift cards administration topping up a card with any amount does not seem to be a problem. Meanwhile, the customer gets the possibility to visit the shop and buy another product within the next 12 months, for example. It may be the same customer and it may be another person presented with such a card.
4. Extraordinary profits
Some customers do not redeem all value of a card within its validity period. The data so far shows that the unredeemed value of all the issued gift cards stays at the level of a few percent with the percentage value going up to over a dozen percent in case of gift cards related to luxury goods. The unredeemed value constitutes extraordinary income of the Issuer.
5. Customer’s return ticket
A sold gift card means that its owner will come back as a Customer to do a purchase of goods. Contrary to vouchers, a gift card provides the facility of executing multiple purchases and that increases the number of potential visits of the card’s owner in your shop.
This supports the issue of high value cards that can be a great present for such events as weddings or house-warming parties.
6. New Customers
A recipient of a gift card comes to a shop in order to redeem it. The data presented by American issuers indicates that 10% of buyers using gift cards are new clients. Those clients have been invited to the Issuer’s shop by its best ambassadors – clients satisfied already. It is hard to imagine that would a person close to you would receive from you a gift card of a brand that you do not like.
A gift card may also serve as an invitation to a new shop and may be distributed as an insert in a newspaper or a magazine. Such card, even of a low value, i.e. 5 zlotys, has a high use indicator. If this is a card for a household appliances shop or a supermarket, its value is usually a fraction of the value of what has really been purchased.
7. End to the price cuts
Constant price cuts result in Customers being used to continuous cuts and sales. Instead of another price cut give your clients a gift card. They will come back to your shop to do another shopping or they will encourage their close ones to do the same.
It is an interesting solution in case of brands that are seasonal. A customer doing the shopping in the summer season may be handed a gift card inviting him/her to purchase clothes also in the winter season.
8. New purchase opportunities
With the application of a few graphic designs on gift cards it is possible to create new occasions to do the shopping all year round. Such form of constant rekindling the interest in gift cards is particularly popular in Anglo-Saxon countries. Examples of such occasions may be Grandparents Day, St Valentines, World Championships, Women’s Day, Mother’s Day, First Communion, Wedding Day, Easter, Father’s Day, Children’s Day, Sports Club, Holidays, School Year, Christmas to name a few. There may be gift cards for every occasion on sale.
Appropriately prepared graphic designs make gift cards even a better tailored present.
9. New sales channels
Due to the quickly growing popularity of a Gift Card, issuers are looking for new possibilities of increasing their availability since the sale of the cards within one’s own chain is insufficient.
Gift cards may be sold over the Internet both on the Issuer’s website and on other websites of independent distributors. Gift cards are readily bought by companies as rewards and bonuses for their employees but also as gifts for the companies’ clients and business partners.
The change of the traditional plastic form of a gift card into the virtual electronic one contributes to the increase of sales through modern channels. Such virtual card may be used as an application on a mobile appliance or even as an independently printed document.
Responding to this expectation, in September 2015, Argo Card announced the premiere of eKody, a new module for GiftPlus.
Another modern solution enabling over tenfold increase of the availability of gift cards for new clients is their external distribution. Argo Card in co-operation with Blackhawk Network, the world leader in the external distribution of gift cards, has met the expectation by expanding its tool and adding a module enabling the introduction of Issuer’s gift cards to such Polish networks as Kolporter, Carrefour or Matras.
10. Prizes in loyalty programmes
If you have your own loyalty programme, a gift card may become a valuable prize in this programme. It is very convenient and cost-efficient. You do not have to buy many prizes and store them only to have to sell the remaining stocks, once the catalogue has been changed.
A gift card does not have to be delivered to a loyalty programme participant in a material form. Such card may be mailed by e-mail as a code, as a piece of information for a mobile application or it may be placed in the customer’s account as a value bonus to be used.
Many organisers of loyalty programmes willingly include in their programmes gift cards of other issuers that are providers of services that are supplementary to the main offer of the loyalty programme organiser. This increases the variety and attractiveness of the awards portfolio.
11. Bigger shopping
While shopping, a gift card owner exceeds the value on the card and pays the difference from his/her own resources. From the information of the French market it has transpired that the value of the sales is commonly 20-30% higher than the value of the gift cards. It is particularly visible in case of small value cards.
12. Great advertising material
Elegant case with a plastic card, made in accordance with your design, constitutes the best advertising material for your shop. Then, your advertising item is presented by one person to another and it takes place in the presence of many other people. Has anybody done the same with your leaflet or folder?
13. New communication channel with a customer
With the user friendly Internet or mobile applications or via an SMS, a client may check the card’s balance, expiry date or history of transactions. While this contact is established you may advise your client on new products, promotions or competitions.
14. Simple and easy implementation
Owing to GiftPlus System access formula as SaaS – Software as a Service – the implementation of gift cards is an enterprise that is inexpensive and organisationally convenient. The user applies WWW browser as basic interface through which one may remotely access the application. Another efficient form to do the above is the use of payment terminal, in the vast majority of cases already installed in POSs.
The last, most convenient and efficient form of co-operation with GiftPlus is its accessibility via sales interface. Recently, it has become the most popular method of using the System. Currently, the GiftPlus system is equipped with communication interface to work with the most popular sales systems on the Polish market such as KC-Firma (Kucharscy), HiperMarket (NET Innovation Software Spółka z o.o.), and PC-Market (Insoft Sp. z o.o.).