This guest post written by Julie Feece who is the Vice President North America – Marketing for RPG Card Services, a sales and marketing organization specializing in offering gift card program services to nationally recognized retailers for their B2B and B2C programs. She has held leadership roles in the incentive gift card industry for over 17 years and has been with RPG Card Services for the past 10 years
Savvy retailers are increasingly seeing gift cards as an effective marketing tool to drive product sales and increase store visits. Gift card promotions are instrumental in supporting customer loyalty campaigns, encouraging greater numbers of in-store customer visits, boosting the average number of in-store purchases, and directing customer traffic to specific locations.
What’s the result of all these gift card-related activities? More product sales.
According to the First Data 2015 Consumer Insights Study, consumers continue to embrace the ease and convenience of gift cards. More than 80 percent of customers purchased the same or more physical gift cards as in the previous year, with 89 percent buying as many or more virtual or egift cards as a present.
Why are gift cards so effective in driving desired types of consumer behavior?
“In the consumer’s mind gift cards represent hard dollar figures burning a hole in their wallet,” notes Ben Gaul at the online news platform Guardian Liberty Voice. Cards with embedded cash value “do not get tossed away, used in the fireplace or left pinned and forgotten on the fridge.”
Here are ways in which gift cards can help your business see greater sales volume:

  • To consumers, gift cards represent “same-as-cash” items, clearly indicating where to exchange them for goods and services.
  • Gift cards, like credit cards, usually stay in a shopper’s purse or wallet, acting as a tangible reminder and making them easy to take out and use while shopping.

Customers start a purchase with gift cards, but often end up buying more — 72 percent of customers spend more than the value of their card, while gift card recipients, on average, spend 20 percent more than the value of their gift card.
Studies show that, when redeeming their gift card, shoppers frequently buy items they’d not planned to purchase. In many cases, this includes a “more expensive version of an item they already planned to buy.”
What are the best ways to encourage your customers to purchase more gift cards and drive additional sales?
Offer free services with a gift card purchase. When shoppers get something free with a gift card purchase, there’s instant good will between the business and customer. Free services offer a great opportunity to introduce new customers to what your business has to offer; assuming they have a positive initial experience, they are motivated to become repeat customers, while also using the gift card to buy more of your products.
Offer a free gift card with purchase. Here’s another way to instill a budding sense of loyalty among your customers. The unexpected addition of a free gift card reinforces a customer’s decision to purchase from your business in the first place. As the statistics already listed indicate, when customers come back to redeem their gift card, the chances are very good they will find additional items (often at a higher price) to purchase as well.
Use gift cards to expand your mailing and marketing lists. When a shopper buys a gift card, you can (with the shopper’s permission) add both that individual’s name and his or her gift card recipient to your mailing and marketing lists. In one stroke, you essentially double the number of customers at the same time. In that sense, they are both “pre-sold” on your business — which can be especially useful during gift-giving seasons and holidays.
If you’re not already considering this approach, now’s the time to begin integrating the use of gift cards as part of a comprehensive marketing and sales strategy for your business.