Since 2009, gift cards have remained one of the most-requested holiday gifts. Now that the holiday season is over, those gift cards will be making their way back into your store to be redeemed. As a retailer, this is a great opportunity to make an impression with new customers and continue strengthening relationships with existing customers. It is no secret that the majority of gift card recipients are looking to spend their balance wisely. Since 90% of gift cards will be redeemed within the first 60 days, and the average shopper will spend an additional 20 percent more than the value on the gift card, January and February are prime time for growing business. Use the following tips to help make the most out of gift card redemption season:
Entice with Promotions
Shoppers are looking to get the most out of their gift card. A strategically planned promotion will offer shoppers the value they’re looking for, while also encouraging them to spend a higher dollar amount. These three promotion types are especially effective:
1. Spend to Save
Offer shoppers a percentage off of their total with a minimum purchase. Take your average gift card sale from the holiday season. If you don’t already know this data, your POS system should have a report that can tell you. Let’s say the average gift card value is $75. A promotion that offers 25% off of purchases of $125 or higher, or 30% off of purchases of $150 or more will encourage shoppers to spend beyond the value of the gift card. It’s still a great deal for the consumer because they are paying very little out of pocket. However, for retailers, those small extra sales can really add up.
2. Gift with Purchase
Similar to the first promotion; offer a gift with a minimum purchase that is a higher dollar value than your average gift card value. As a general rule, the gift should have a retail value of at least half the amount you are asking consumers to spend.
3. Newsletter Incentive
During gift card season you will see many shoppers who have not visited your store before. This is an excellent opportunity to build a relationship and earn repeat business. Encourage customers to provide their contact information for a percentage off their purchase. That way you can send them future promotions, newsletters, announcements, and make a positive first impression. This particular offer won’t increase the revenue from the first purchase, but will hopefully be the start of an ongoing customer relationship.
Offer Limited Time Products
Limited time or seasonal products allow shoppers to purchase something special and unique with their gift card. Limited time and quantity also create a sense of urgency, which helps motivate shoppers to use their gift cards and depending on the items, make a larger purchase.
Proactive Sales Associates
Customer service often makes or breaks a shopper’s experience. This is especially true if they have never been to your store before. Employees should be knowledgeable about all promotions and feel comfortable initiating that conversation with every customer. Educating customers on what promotions and products are available is important for them to be able to make an informed purchasing decision.
Get the Word Out
In order for these promotions, exclusive products, and helpful sales associates to make a positive impact on your bottom line, you need to have customers coming in the doors to utilize them. Allocate some advertising dollars in this typically slow season while other retailers are taking a break to boost visibility for your store and promotions.
The first few months of the New Year can seem slow for many retailers. However, having a plan for upselling gift card redemptions can put you on pace for a prosperous 2017.