Boosting Holiday Sales with Gift Cards

When looking for ways to boost your sales during the upcoming holiday shopping season, look no further than gift cards. Once thought of as too impersonal a gift for loved ones, more and more consumers are turning to the ease and convenience of gift cards for everyone from spouses to co-workers. And, as today's retail point of sale systems continue to improve, more and more retailers are offering gift cards to their customers.

According to Retail Merchandiser, gift cards are expected to be the top gift purchase for the fourth straight year. More than 2/3 of consumers surveyed said they planned to purchase at least one gift card this year, up 3% from last year. Consumers are not only expected to spend more per gift card this year—$36.25 per card on average this year, a 20% increase over last year—but they're expected to buy more gift cards. And, gift cards continue to grow in acceptance. This year, 39% of people surveyed said they would rather get a gift card than merchandise and only 19% said they feel gift cards are too impersonal. Nearly half said that they would buy gift cards for members of their immediate family.

Many of today's retail point of sale systems have gift card functionality built into the retail software. Stored Value Cards (SVCs) are the most common type of gift card. They're uniquely numbered on the back, with each card representing a specific dollar value to a particular merchant's store. SVC gift cards typically include a magnetic stripe encoded with a unique ID number, allowing them to be processed with a standard MSR device. The "value" of each gift card is typically stored in a central database that is hosted by a third-party.

The best retail point of sale systems will not only allow you to sell these cards to your customers, but also to recharge them with additional funds if need be. In addition, you can also process merchandise returns to add funds to an existing gift card, view the current card balance, and issue cash back and clear a gift card's remaining balance.

Gift card sales not only boost your bottom line, they also help establish your brand. When you design your cards, you should include your logo, your slogan, the Web address of your ecommerce store, your contact information, and any other information you deem necessary. Not only will you retain you current customer base, but a well-designed card can give you an entry point to generating new customers.

For a fourth straight year, gift cards are forecast to be the top gift purchase this holiday season. They're a proven way to not only boost your bottom line, but also build loyalty with your customer base. With your competition offering them, can you afford not to?