By Shelley Hunter

As more shoppers use smartphones and seek convenient shopping solutions, digital gift cards are becoming essential tools for any business. They’re not just about technology; they’re about meeting your customers where they are—online and on their phones.

While the ideal scenario might include a suite of customization options, the first and most crucial step is straightforward: provide a digital purchasing and delivery method for your gift cards. This initial step doesn’t require a complex infrastructure—just get your gift card up on your website, extending the convenience to your customers quickly and efficiently. With the holidays approaching, there’s no time to get fancy.

Launch Your eGift Card ASAP

• Easy Setup: Launching a basic digital gift card program with minimal technical investment is straightforward. Factor4 can get your egift card system up and running in just a few weeks—well before the holiday rush if you act quickly.
• Early Visibility: Launch your program promptly to leverage every promotional opportunity. Include a link to your gift card sales page in your newsletter, actively share it across your social media platforms, and prominently display a QR code next to the physical gift cards in your stores or restaurants. It’s crucial to capture your audience’s attention before the flood of holiday promotions begins, ensuring your gift cards stand out in a crowded market.
• Immediate Access: Today’s customers expect digital solutions for all their shopping needs. If they don’t find a digital gift card option on your website, they will likely turn to a competitor offering this convenience. Make sure your gift cards are easily accessible and prominently displayed to keep your customers shopping with you.

Turn on the Jets: Optimize Your eGift Card

Now that your eGift card program is active, it’s time to focus on making it more profitable. Contrary to the common misconception that businesses benefit most when gift cards go unused (breakage revenue), the real value lies in their redemption. It’s like opening a restaurant where you sell food but secretly hope no one ever tastes it or a shoe store where you sell shoes you hope no one ever wears. Sounds counterintuitive, right? Just like these silly scenarios, focusing on unredeemed gift cards isn’t a great business strategy–and worse, it misses the true opportunity.

Here are some ways to maximize the value of your egift card program:

1. Train Staff to Promote Gift Card Use: Encourage your cashiers and servers to ask customers if they are shopping with a gift card. This simple question serves as a reminder for those who might have forgotten about their gift cards and gives your staff an opportunity to express appreciation for gift card holders. By emphasizing that your business values their choice to invest in your brand, you enhance their shopping experience. Customers who feel like VIPs for using their gift cards are more likely to remember this positive experience and consider purchasing them for others–expanding your customer base.
2. Offer Redemption Incentives: Motivate customers to use their gift cards by introducing enticing promotions. For instance, offer a complimentary cookie when they redeem their restaurant gift card in January—a typically slow month. This strategy accelerates redemption rates and boosts foot traffic and sales during periods when business might otherwise be slow.
3. Encourage Using the Full Value of Gift Cards: Motivate your customers to utilize the entire value of their gift cards by offering a bonus when they do. For instance, provide a complimentary dessert or offer free soda refills when a customer redeems the full value of their restaurant gift card in one visit. Alternatively, reward them with product samples when they exceed the gift card’s value at your store. This approach not only ensures that no residual balance remains unspent but also subtly encourages customers to generate higher total bills. By making it rewarding to use the entire gift card, you enhance the customer’s experience and increase your sales simultaneously.
4. Integrate Gift Cards into Your Loyalty Program: Connect your gift card program to your loyalty system. Offer tangible rewards, points, or future discounts to customers who purchase or redeem gift cards. For instance, each time a gift card is bought or used, the customer could earn points that accumulate towards a discount on their next purchase or a free product after reaching a certain threshold. This integration incentivizes frequent usage and higher spending and reinforces customer loyalty by showing appreciation for their continued patronage.
5. Regular Communication: While direct marketing to gift card recipients who haven’t opted in is restricted, you can still share general information through emails, newsletters, social media, and in-store signage to keep all customers informed. Consider running special promotions exclusively for gift card holders, such as “It’s time for spring cleaning! Bring in that unused gift card and receive a free plant when you redeem its full value.” Such strategies encourage redemption, act as reminders, and making each gift card holder feel valued and special. This kind of engagement helps maintain customer interest and loyalty, turning occasional buyers into regular patrons.
6. Utilize Data Analytics to Enhance Gift Card Strategy: Harness the power of data from gift card sales and redemptions to refine your marketing efforts. For example, conduct A/B testing to gauge customer reactions to various incentives, such as offering a free appetizer at the beginning of a meal compared to a free dessert at the end. Analyzing these results may reveal preferences that suggest strong customer loyalty, especially if certain promotions lead to increased self-use of gift cards. Use this valuable data to optimize your gift card program, ensuring it aligns with customer preferences and business objectives.

By shifting focus from mere sales to actively encouraging gift card redemption, your business can maximize profitability, deepen customer relationships, and build a sustainable growth model. Utilizing data from sales and redemptions can help optimize and increase profits. For example, consider the powerful impact of selling $5,000 in gift cards and achieving $4,725 in redemptions, with customers overspending by an average of 37%. This statistic underscores the substantial benefits of a redemption-focused gift card program, demonstrating its value well beyond initial sales.

Remember, each redeemed gift card represents more than just a reduction in breakage; it’s an opportunity to transform a one-time shopper into a loyal, repeat customer.

Interested in getting your business set up? Reach out to our team and we’ll get you started right away! Contact us HERE or reach out to us at sales@factor4gift.com or (484) 471-3963

About Shelley Hunter

Shelley Hunter has been the leading consumer voice in the gift card industry for over 15 years, founding GiftCardGirlfriend.com (acquired by Giftcards.com), GiftCardReform.com, and GiftCardsYouCanTrust.com. She helps consumers make safe and informed gift card choices, focusing on usability, security, and support.

Mid- to large-size businesses can sign up for Shelley’s Gift Card Certification program to receive personalized consulting and be listed as a trusted gift card provider. Small businesses can contact Shelley to discuss tailored consulting services that fit their needs and budget.