One of the most powerful marketing tools that you have at your disposal is the gift voucher. Used effectively, a gift voucher does not just bring revenue into the business. It also builds a stronger relationship between you and your customer, helps you to find new customers (the person getting the gift voucher may have never been a customer previously), and raises your brand awareness in the marketplace.
Just look at a business such as Redballoon, which largely sustains itself on gift certificates. That’s an extreme example, but also an example of a business that has found success in encouraging people to give gift certificates, rather than cash gifts.
Money isn’t a personal enough gift for most people. For this reason it’s important that you make your gift is personal, as a cash replacement. Done well, and there are all kinds of benefits that gift vouchers will return to your business.
1. They mean free money (literally)
Laws have recently been enacted to put a minimum three years expiration date on gift vouchers, in order to stop retailers capitalising on gift vouchers expiring too quickly. Nonetheless, there will still be gift vouchers that go unused, meaning the revenue returned to your business cost you nothing more than the cost of printing the certificate.
2. Gift vouchers are easy to distribute
They’re small and light, so it’s easy to distribute gift vouchers or even make a promotion out of them. How many times have you opened the mail to find a $10 gift voucher? Those are cheap to produce and for a small discount you’re almost certainly going to make a larger sale when someone walks through the door.
3. Gift vouchers encourage larger purchases
If you’re given a gift voucher for a performance, you’ll probably buy a ticket to take a friend along with you. A person that gets a voucher for a book store may well take it as an opportunity to go on a splurge. A gift voucher that covers the cost of a meal at a restaurant may encourage the diner to buy a nicer bottle of wine to go with it.
Shopping with a gift voucher is an experience – and a very pleasurable one at that. The person with the gift voucher is much more likely to use it as an opportunity to spend big than if they didn’t have the voucher in the first place.
4. Gift vouchers help you control your promotional costs
One of the greatest benefits of the gift voucher is that it has a set value: whatever’s on the face of the voucher is what the consumer has access to. When they spend big, their discount will be a flat rate, regardless of how much they’re spending. If you run a promotion in which you send out $10 gift vouchers, you can instantly calculate how much that campaign is going to cost – it’s the value of vouchers sent out.
By contrast, a popular marketing tool is the discount coupon – get XXXX% off your next purchase. This introduces an element of uncontrolled cost to your business. You can’t be sure just how much that promotion will cost you, as you can’t be sure just how big the purchases that people make will be. And as the purchases increase in size, so too does the cost to your business.
5. Gift vouchers are highly customisable
Coming up with bright, colourful, slick and aesthetically-pleasing designs turns the voucher into more than a transactional device, and a collectible in its own right. It doesn’t have to be simply a reflection of your brand.
Many brands are now creating seasonal designs that encourage consumers to make repeat purchases of gift vouchers, and to help other customers buy the ideal gift for someone else – A Christmas-themed gift voucher on Christmas simply feels more fitting, in other words.
6. Gift vouchers make for an excellent way to support charity
Rather than simply make a donation to a charity, consider making the process interactive with your customers by making the proceeds of a gift voucher the donation to charity. Have a special charity gift voucher designed, and then, in addition to supporting the charity through the purchases of gift vouchers (and you’ll find that consumers are much more likely to purchase vouchers when it’s for charity), you’ll have the additional branding benefit of whoever gets given the gift voucher knowing that you’ve supported the charity.
That “word of mouth” branding will continue on long after a single donation to a charity would have.
7. Gift vouchers are an excellent way of handling a returns policy
Handling returns is a challenge for any organisation. There are a significant number of people out there that will try to get some fast cash by “returning” stolen merchandise or expired items.
Issuing gift vouchers rather than cash where possible is an effective way of minimising the harm done to your business from this practice. In the first instance, it acts as a significant deterrence, and many people that would otherwise attempt returns fraud wouldn’t bother if they are going to get a gift voucher.
The other benefit is that it keeps the money in the business, which still helps to move inventory and maintain sales volume.
8. Gift vouchers can become a central feature of all your promotional activities
A winner of your Instagram competition might win a gift voucher to your store. The rewards from your loyalty program might include a gift voucher on your customer’s birthday. If a customer makes a major purchase, you might give them a gift voucher in return. If you partner with another company, you might provide gift vouchers for sales made to their businesses.
These are just some of the scenarios in which a gift voucher can become central to your marketing activities.
9. People with gift vouchers don’t go sales shopping
Studies show that people who are shopping and using a gift voucher are 2.5 times more likely to make purchases at full price than people who are buying things with cash. A gift voucher is often not “their” money. Customers are less guarded about getting value when using it.
With retailers increasingly struggling with the unending demand for bargains and low-margin sales shopping, gift vouchers therefore represent a rare opportunity to maintain a healthy margin with sales, and move new and seasonal products before they need to be heavily discounted.
10. Gift vouchers help keep strong sales numbers during off-peak seasons
In the run up to Christmas, you’re probably making good sales numbers. After Christmas, most retailers experience an absolute slump, as consumers recover from the excess in spending and generally don’t have much of a desire to go shopping. Here’s where a gift voucher can be essential. People who get gift vouchers over Christmas will be most inclined to use them immediately afterwards, when they might not otherwise have the money (or there’s something they really wanted that they didn’t get as a Christmas gift).
While a gift voucher doesn’t necessarily result in revenue for you at the point at which the voucher is used, it still helps keep feet coming through the door, inventory being turned over and keeps your brand in the front of people’s minds.
For these ten reasons, it’s critical that your business looks to invest in gift vouchers in a meaningful way. Make sure that they’re displayed prominently in your store (generally speaking they’re best placed at the point of sale, as they can often be impulse purchases), and make sure they’re bright, colourful and attractive!
It’s also important that you make the terms and conditions of the vouchers clear for your customers – make sure they’re listed somewhere on the voucher itself (perhaps on the back), or the packaging that it comes with, and that it lays out the expiration date, the value of the voucher, how it can be redeemed, whether it can be redeemed for cash (not recommended) and so on. Customers won’t appreciate it if they feel they’ve been “cheated” somehow, so it’s important that they understand the conditions of the voucher from the outset, to prevent hassles down the track.