I’ve recently come across an excellent written piece about gift cards and found it interesting. I’ve always thought getting a Visa gift card always trumps getting a store gift card like GAP or Neimann Marcus.
This article from the Business Financial blog makes a case of how an in-store gift card makes a better gift for the holiday season than Visa gift cards.
The holiday season is coming up, and with the holidays comes increased profit. This is the time that most merchants are trying to think of ways they can maximize their revenue.
They spend months making marketing strategies, planning sales, creating fliers; it is the season that carries them through the slower seasons. It is, in essence, the most important time of the year in retail.
One of the best ways to maximize that holiday season revenue that is typically overlooked by small, independent businesses but has been capitalized on by the chain stores for a long time now, is gift cards. Gift cards have been available for years, but have only started really gaining in popularity for the last decade.
Visa Gift Cards Vs In-store Gift Cards – Which is Better?
There are two major types of prepaid gift cards that dominate the market today:
1. Visa, MasterCard, or AmericanExpress cash gift cards.
Typically called “open loop” gift cards, these cards are pre-loaded with whatever cash amount the buyer chooses and can be used wherever the cardholder chooses to use them.
They are provided that a particular place of business accepts Visa, MasterCard, or AmEx. Often marketed as a “pre-paid credit card” to those with bad credit, these cards can sometimes even be used at ATM’s, depending on the issuer.
2. The other type of gift card is a proprietary, or “closed loop” gift card.
These cards are sold by merchants for use only in their stores. These are much more popular than open-loop cards, simply for the fact that they’re much more personal than giving a gift card with cash on it.
Obviously, your business is going to want the latter of the two, the proprietary card, to ensure that the customer is going to use their gift card in your store and no place else. But why?
Let’s consider the bird-in-the-hand principle: when you sell a gift card, you’re not creating one customer, but rather, two. If a woman buys her husband a gift card for Christmas, you’ve now not only created a customer out of her but a customer out of her husband, as well.
And let’s throw breakage into the equation. Either one of two things are going to happen:
He’s going to spend $44.99 of that $50.00 gift card, getting no change back leaving you, the merchant, with that extra $4.01 as profit, or
he’s going to buy a $75 item figuring it only cost him $25, leaving you, the merchant, with that extra $25 as profit
Another benefit of accepting gift cards is that, oftentimes, your company gets to create the design on the front of the cards. Make it as classic or unique, as plain or original as you desire. Hire someone to create an eye-catching logo, or save time and money and do it yourself. The choice is yours.
If you wish to buy or receive an in-store gift card, mychoicegiftcards.com is probably the best best online to get it. If you prefer Visa gift cards so you can use it anywhere, Visa is accepted, Giftcards.com is the gift card merchant for you.
You may also want to opt for American Express® Gift Cards if you already have an American Express credit card, which waives your purchasing fees.