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Member Benefits

Gift cards means increased revenue!

by Kimberly Layton, First Horizon Merchant Services

Gift cards are a lucrative item to add to your inventory. Going into the holiday season without them would be a mistake.

Gift card sales have increased from $30 billion in 2002 to $45 billion in 2003, and are predicted to rise to $90 billion by 2007. More than half of all adults in the U.S. purchased a gift card in 2004.

Some uses of gift cards are:

  • Gifts for holidays and special occasions (birthdays, housewarming, graduation, etc.)
  • Promotional marketing tools
  • Corporate gifts
  • Replace paper gift certificates
  • Merchandise returns
  • Service credits
  • Customer appreciation

Some of the benefits of electronic gift cards are increased revenue. Users will purchase more than the value of the card. In fact, 61 percent of card recipients spend more than the card value. Loyal customers will bring new customers into the store with your gift cards. And gift cards are used by 45 percent of adult customers.

Cards sold but never redeemed add to your bottom line. Cards with unspent balances also translate into incremental revenue based on certain features of the card program you select.

You can also reduce your cost of issuing and reconciling paper gift certificates. This is accomplished when activating electronic gift cards with your existing point-of-sale terminal or software. And because the cards have no value until activated at the point of sale, fraud is greatly reduced.

Pricing takes shape in many different forms. For small retailers or those just starting out with gift cards, a package that includes displays or envelopes and low transaction costs offer real value. Many providers can deliver cards to your business within five to 10 business days. Custom designed cards may take longer.

You cannot afford to pass up your slice of the gift card revenue pie. It keeps on giving by bringing customers back to your business and new customers as well.

Upgrade to electronic gift card solution today by calling First Horizon Merchant Services at 1-866-894-8600 and mention your association affiliation/membership. Give your customers the same convenience they get from other businesses.

Reprinted from SQE Professional, November 2006