Gift Card Marketing – Increase Your Revenue and Customer Base

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In the past, only large retailers had gift card programs. A gift card is a card, similar in appearance to a credit card, that can be purchased by a customer from a business, for a set amount of money, and used at a later date as a payment method at that business. They are called gift cards because, primarily, they are purchased by a customer and given as a gift to another person. They are reminiscent of gift certificates that were used before sophisticated electronic point of sale systems became inexpensive enough for small businesses to own. They provide instant revenue to a business with no immediate movement of inventory or procurement of a service. They also, by the very method in which they are given as gifts, work to increase ones customer base.

Gift cards provide instant revenue to a business. Thinking of it in accounting terms, when a customer purchases a card, the company's cash account is credited for the amount of the card. There is no immediate debit from any asset account. There is also no immediate service offered requiring labor hours. When the card eventually, if ever, makes it back into the business for use as a payment method, at that time an asset is debited for inventory, service, etc. However, if, for example, the card was purchased for $ 100.00 and the customer purchases a few DVD's and the total comes out to $ 82.00. In one scenario, the customer buys the DVD's and never uses the gift card again, loses it, etc. Now, not only did the business make profit from the $ 82.00 retail price on the DVD's, they have an extra $ 18.00 in pure profit from the un-used gift card funds. Another scenario the customer buys $ 114.00 worth of DVD's, uses the entire gift card balance and pays and additional $ 14.00. Although, not as profitable as the first scenario, good nonetheless.

Gift cards increase the customer base of a business. When a card is purchased, it is usually purchased for that purpose: to be given as a gift. Logically, someone who enjoys being a customer of a particular business, who wants to share it with a friend, relative, family member, or coworker could purchase one as a means of recommending that person to the business. Think of the reasons that you, the reader, have purchased them for people in the past. Maybe you know that your dad loves action movies, but you aren't sure exactly which ones he has seen, and you don't want to call and ask because then he might get tipped off about your gift. Perfect! Buy a gift card, and let him choose exactly what he wants. Everyone reading this article has most likely participated in a similar scenario. It are these two main points thats make this method of marketing an essential tool for expanding revenues and increase the customer base of any business.

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Source by Paul D Roberts

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