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Gift Card Marketing for the Holidays

Posted by jtolman to Marketing Tips on October 21st, 2013

One of the easiest ways to increase your online sales for the holidays is to market gift cards.  They not only encourage purchases, but gift cards also help you to acquire new customers, keep old customers, and increase their cart size.  What’s more, gift cards are one of the most popular gifts for the holidays!

According to a National Retail Federation survey, 81% of American adults will buy at least one gift card during the holiday season.  In fact, 90% of US consumers either purchase or receive a gift card each year, according to WorldPay.  Last year alone, $110 billion was loaded on gift cards.  70% of customers who use gift cards will spend more than the value on the card.

Does your ecommerce store sell gift cards?  If so, how do you plan to market gift cards to your customers for the holidays?  We’ve got the answers for you!


Lowes.com

Electronic Gift Cards vs. Physical Gift Cards

Electronic gift cards and physical gift cards both have their pluses and minuses. We’ll explore the benefits and disadvantages of each:

Electronic Gift Cards

Advantages:

  • Can be printed out repeatedly
  • Doesn’t cost anything to produce
  • Customer can receive immediately

Disadvantages:

  • Harder to market
  • Seems less substantial to customers
  • Not as attractive as a gift

Physical Gift Cards

Advantages:

  • Easier to market
  • More substantial to customers
  • Reminds cardholders of your business

Disadvantages:

  • Can get lost or stolen
  • Can cost as much as $1.00/card
  • Needs to be shipped

Market Discount Gift Cards

One effective approach to marketing gift cards is to offer a discount promotion when purchasing.  For example, when shoppers purchase a gift card for $20, you can then use the opportunity to up-sell the customer by offering them a $30 gift card for only $25.  More than likely, the customer will be willing to spend the extra $5 to get a higher value on the card.

Other discount strategies can be used just as effectively.  For example, customers can purchase a $25 gift card for only $20 when they purchase 2 or more.  This specific discount approach will double the original amount.

Delayed gift cards are also commonly used.  When a customer buys a $50 gift card for $45 on December 1st, the card can only be used for a purchase after January 1st.

Market with a Social Conscience

One way of influencing shoppers to purchase gift cards is to give them a buying choice tailored to their desire to give back.  For every $50 gift card, you can offer to give $5 to a charitable organization related to your business.  By linking social conscience with online retail, you can use marketing for a good cause.  Often times, charities will even help businesses with their marketing initiatives, if they are aware of the promotion.


Toms.com

Market Kickback Gift Cards

A kickback gift card can be marketing by offering a promotion when the customer gets a second gift card as a reward for buying the first one.  For example, if a customer buys $100 in gift cards in December, you could offer a $10 kickback card, which would arrive via email or postal service in January.


Macys.com

Retailer Tips:

  • Brick-and-mortar retailers display their gift cards at the register.  Likewise, online retailers can offer gift cards at the checkout to encourage spontaneous purchases.
  • Each state has its own regulations for marketing gift cards, so it is important to research laws for each jurisdiction that your online business has legal nexus in.
  • Offering a physical card is dependent on marketing resources, but always offering an electronic version of the physical card is considered a best practice for ecommerce gift cards.

The 2013 holiday shopping season is here, so the time to start marketing and selling your own gift cards is now!

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