Studies have shown that the global gift card market is more likely to grow at a CAGR of 13% between 2020-2023. For retailers, offering gift cards to their customers has become easier thanks to sophisticated tools in the market that make it possible to create and distribute gift cards easily.
As gift cards become increasingly important, here are 5 reasons why retailers should offer gift cards:
1. Cash Upfront
There is nothing better than being certain that a purchased product will not be returned to the store, and this is exactly what happens when a customer gets a gift card.
In addition to this, when a customer buys a gift card and, even when it is not used, it is considered as accrual accounting, and after a point, those gift cards never redeemed become breakage income to the company.
2. Omnichannel capabilities
Using gift cards as an Omnichannel payment method is increasingly common in the retail industry. They can easily be redeemed in a variety of channels, including e-commerce, mobile app, in-store, or using a combination of all those options. It makes life easier for the customers which we all know is a great strategy for the retailer in the end.
3. Lower risk of fraud
Gift cards make customers feel safe and secure about their money spent, its balance can be checked automatically and the payment verified in-store once the purchase is done.
4. Additional sales around the holidays
Holiday seasons are great occasions to purchase gift cards. Those last-minute buyers and those who are insecure about their purchases, are relieved with this quick solution from retailers in both brick & mortar and online.
5. Gift Cards provide valuable data to the retailer
Gift cards allow retailers to collect essential customer data, which helps retailers to understand buying patterns such as preferences in certain products or categories as well as the average purchase rate. In addition to this, all these customer insights can be leveraged to create marketing strategies focused on retaining customers and getting them engaged.
In short, Gift cards are the best option for retailers to increase sales while building customer loyalty.