Gift certificates and gift cards are a great value for retailers. That statement seems counterintuitive, because it would seem that you get money now, only to have to perform the service later for nothing. Not so fast! There are great reasons to sell gift certificates and gift cards, the least of which is possibly getting new customers in your doors.
First, lots of people buy them, not as many actually remember to use them. Statistically, about 6% of gift cards end up not being used by the recipient. That means the retailer or service provider made money in exchange for nothing; not for a service or a product. Another great statistic: people using gift cards are two and a half times more likely to pay full price for products instead of waiting for a sale. To them, psychologically, it’s found money so why worry about saving any of it or trying to get more for it like they would earned money? Also, how many times have you used a gift card and it’s not enough for what you purchase? Happens a lot, and a majority of customers will spend about 20% more than the value of their card or certificate.
As I mentioned above, they are also a good way to bring in new customers. Say an existing customer purchases a gift card or certificate for a friend to introduce them to the favored business. That means the business has a great chance to turn a new customer using it into a great repeat customer as well.
All of the above reasons also help the post-holiday shopping slump. Between returns and less people shopping, those using gift cards can help keep sales up after the holidays. Between those who buy more than the value of the card and the repeat business, gift cards and certificates can be a boon for January retail sales numbers.
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