There are several benefits to small business owners offering gift cards to their customers.

Gift cards are extremely popular at large, corporately-owned, big-box stores. But if you proudly own a local small business, there is absolutely no reason you shouldn’t explore the possibility of offering gift cards to customers this holiday shopping season. Here’s why:

— They are like immediate sales.

When a customer buys a gift card for $25, $50, $100, or a larger amount for themselves or as a gift for a loved one, it’s like an immediate sale. This holds true even if the gift card is never used in the future. Plus, it does not impact your inventory, and it’s a great way to give purchasing power to customers who want to choose their gifts rather than being handed something they aren’t in love with. Everyone knows what gift cards are for, so there is really no easier sale than selling a gift card.

— They bring new customers into a retailer.

Gift cards represent a marketing tool, which is why they can help drive new customers to your small business. Let’s say you give your granddaughter a gift card to a clothing store for her birthday. Perhaps she has never been to this store. All of a sudden, she has become a new customer and will ask her parents to take her there to use the gift card. The same could be said for a friend giving someone a gift card to a local restaurant, which is essentially like referring them to it.

— They often lead to larger purchases.

Many gift cards are for smaller amounts like $10, $15, or $25. However, the prices at many of these stores that offer them do not always fall within these smaller amounts. This is why the use of a gift card can lead to a larger purchase. In other words, if a customer buys something for $50 but only has a $25 gift card, they’ll likely use it to go toward this purchase, knowing they are saving money. But in the eyes of small business owners, they are actually spending more than they might have spent without using a gift card.

— They’re a nice alternative to cash returns.

Larger retail outlets often give out gift cards to customers who go to a store to return a certain item but do not have a copy of their receipt with them. Simply offering customers a gift card is much easier than having to look up a transaction that the customer made. Plus, it’s a great incentive to customers by giving them a reason to come back and give your retail outlet a second chance.

— They are great stocking stuffers.

Trying to think of small items that would fit in a stocking to hang on the mantle? Consider either offering gift cards if you’re one of the many small business owners out there or purchasing these gift cards for other retailers. They’re a popular option for stocking stuffers, and both youngsters and people of all ages love digging through their stockings to find cool gift cards at the bottom of them.

— They fit easily into envelopes.

Perhaps your customers are looking for gifts to send their family members in other states. It’s quick and easy to stick a gift card with your holiday card before putting it in the mailbox. Plus, if your company sells products or services online, it won’t matter where your relatives live since they’ll be able to use it on the Internet. Speaking of online sales, e-gift cards are a convenient and inexpensive option to offer as well. Just ensure that the process of using the card on a website is simple enough for everyone to follow.

To learn more about the financial benefits of offering gift cards in a small business, and for all of your business accounting support, consider turning to 1-800Accountant. Call 1-800-222-6868 or visit the “Services” page on www.1-800Accountant.

Image credit: The image of the gift card included in this blog post is used with permission via the Creative Commons license through Flickr.

Additional Reading: From our friends at Behalf: learn what the #1 overlooked reason is for offering gift cards in your business this holiday shopping season.


Written by Taylor Covey

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