Think of gift cards as valuable low-hanging fruit. When set up correctly and targeted to the right customer, they practically do the work for you.
Something as simple as gift cards have the ability to ramp up sales and can ultimately add a nice boost to your bottom line. That’s because there’s a huge market for gift cards. According to a recent report, gift card sales hit nearly $6.36 AUD ($4.17 USD) billion in 2019 and are expected to reach $8.35 AUD ($5.47 USD) billion by 2023.
Read on for more information on the Square gift card programme and tips on running a successful gift card strategy that feels right for your business.
How to create gift cards for your business
With Square gift cards, you can decide whether you want to work with predesigned card templates or create your own custom look. There’s no subscription or redemption fee for gift cards, and they cost as little as a dollar per card, depending on your order, and digital egift cards are free. Once your gift card programme is up and running, you’ll receive transfers for gift card activations in as little as one to two business days.
How to use gift cards to drive sales
To be successful at selling gift cards, you’ll need a strategy. Here’s a step-by-step guide on how to increase gift card sales.
1. Determine your target customer
Will your gift card programme be more attractive to new or returning customers? You can use your Square Dashboard to create business reports and review spending habits and get insights about how you might best utilise gift cards, depending on who’s shopping, how, and when.
2. Set some goals
Look to your Square Analytics to determine estimated quarterly sales for your business and then come up with a goal for gift card sales.
3. Decide where to sell gift cards
Are you going to make your gift cards available in your store, online, or both? Placement of physical gift cards is important, so think about your store setup and whether signage and a location next to the register might help you increase gift card sales. If you’ve already taken the time to create an online store, make sure you create a gift card section in the main navigation on your site, where you sell both physical gift cards and egift cards. The more visible your gift cards, the better positioned you are for success.
4. Decide when to stock up on gift cards
Keep in mind that typically, a large percentage of gift cards are sold in the fourth quarter, during the holidays, so plan accordingly when deciding how many gift cards to purchase and scale up the quantity of cards on offer for the last three months of the year.
5. Determine your inventory
After you’ve done your homework and have a solid idea of estimated sales for the year, it’s time to figure out how many gift cards to purchase. Do you want to start small and place additional orders throughout the year on an as-needed basis? Or do you want to go big and bank on strong gift card sales? Square provides three options for ordering gift cards. A starter pack requires a minimum purchase of 20 cards (at $2.75 per card) and offers four card themes from which to choose; a quick card pack requires a minimum purchase of 75 cards (from $1.30 per card) and applies your business name to a template card; custom card packs require a minimum order of 75 cards (from $1.50 per card) and allow you to fully customise your business’s gift cards.
6. Manage your inventory
Throughout the year, keep close track of how many gift cards you’ve sold in relation to how many you purchased so that you can place orders for additional cards before you run out. You never want to risk having to turn a customer away because you underestimated supply. Gift cards are integrated right into your register and Dashboard, so you can sell, redeem, track, and reload without any additional tools. Plus, gift cards show up in all your reporting. You can even export a full report of gift card sales right from your Square Dashboard. Additionally, think about the price points of the gift cards you’re offering ($5, $25, $50) and the merchandise that your business sells for those amounts. Use Square’s inventory management tools to track stock quantities and sign up for email alerts when items start to get low so that you never run out of those gift-card-worthy items.
7. Have an accounting strategy
Now that you’ve determined how much of your budget to spend on gift cards, you want to keep an eye on your progress by staying on top of sales and continuing to manage your budget using Square’s business analytics tools. Through Square Analytics, you can see how much you sold this week, last week, last month, and even six months ago. The reports can even help you figure out why sales might be up or down.
8. Monitor customer behaviour
Take the guesswork out of selling by getting to know your customers better. Square’s customer loyalty program tool helps you build a customer directory right from your register and provide valuable customer insights that help inform your business decisions. You can also monitor private feedback that customers give through digital receipts. Meanwhile, Square Analytics shows you behaviours and patterns — how much customers spend and how often they return — arming you with the details you need to make the best decisions. Plus, Square’s free Dashboard app means that you can do all this no matter where you are.
Square Gift Cards
Let your customers give the perfect gift — gift cards from your business.
Tips on Selling more Gift Cards
1. Display in highly visible locations in store
A high percentage of customers looking at your site will be shopping with someone else in mind. If they don’t see a product that would suit their intended recipient quickly, or if the product they are looking for is sold out, they will leave your store faster than you’d realise.
To ensure you always have at least one suitable offering, create plenty of prominent mentions of your gift card service. For your online store, this includes showing gift cards as with the other results of any search done across the site.
2. Sell across multiple channels
A strong omnichannel marketing strategy will enable you to get consistent brand messages across any retail channel you use. And if there is one product you can confidently put out across all of your channels, it is gift cards. Using multi-channel loyalty and gift cards is one of the best solutions for omnichannel success. Gift cards might well be the one product you can list on any channel, targeted at any user group, which will never go out of style.
3. Gift cards for special events
You can expect gift card sales to go up at certain times of the year, like Christmas, Mother’s Day or Father’s Day. But don’t forget that customers are shopping for gifts for other special events all year round. It makes sense to place gift cards near products that might be considered for birthdays, wedding gifts or new babies. These special events can be the perfect occasion for the giving of a gift card.
4. Use gift cards as a promotional tool
Using your gift card service in marketing messages makes sense. You might want to try a social media post about a happy gift card recipient or a reminder about the service in your e-newsletter or blog. A gift card sale is an evergreen opportunity to increase your income during the off-season.
5. Consider the people outside your target customers
A gift card is a great fallback for people who want to get a loved one a gift they will really use, but don’t know quite what that gift might be. For this reason, you will have new customers coming to your site looking for gift cards.
If these new buyers know very little about who you are or your product offering, they will want a simple, quick and easy transaction. Make it simple for them to get the gift card and then get out of there!