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Part 1 – Do people really use gift vouchers?
Look in your wallet or purse. Do you have a gift card or two sitting in there? How long has it been sitting there, maybe so long that they have expired. Someone spent money to give you a card or voucher and now that business has that money for free. If you are a business, do you have gift cards or vouchers? Would you like to earn free money in the form of new customers that you didn’t have to spend time and money marketing too? We are going to discuss gift vouchers and cards, and how you as a business can make the best use out of them.
According to a survey by the financial research and comparison site Finder, there’s $267 million dollars worth of unspent gift cards in New Zealand, with 36% respondents in the survey having at least one unused gift card. The average person had three cards for a combined total of $72. A survey conducted by Consumer NZ of their members reported that 77% of them receive gift cards regularly. Their members reported that more than half received 1 or 2 gift cards in the past two years, almost 20% received 3 or 4 cards, while only 23% have not received a gift card in the last two years. The average value per gift card was between $50 to $70. However, more than half have reported that they have $20 or more unspent because they are unable to redeem them.
If we look at overseas trends we can see the following. According to Pitney Bowes (a US shipping firm) 56% of Americans receive gift cards during the Christmas season with the average consumer getting three such cards. A 2018 study by First Data survey of prepaid currency (gift card and vouchers, e-vouchers, etc), that the average US consumer spends $59 USD over the face value of the card or voucher. It also found that the purchaser of the card spent on average 55% of their gifting budget on gift cards, with 33% spending more on the card than what they would on a traditional gift. Fiserv, a electronic payment and processing systems supplier, in their October 2021 gift card survey, reports 58% of American consumers prefer to give gift cards in 2021 over 42% in 2020. Bankrate.com reported that 51% of US adults have unused gift cards, with at least 29% letting at least one card expire, followed by 27% losing the card, and 21% of them being unused because the company went out of business. If the card is spent only 23% of consumers will spend within one month, 48% within 2 months, and the majority of 70% spends within six months of getting the card.
What do we take away from this mess of data I just quoted.
It’s clear that having a form of gift card or voucher is another important strategy for a business to have as it not only increases the potential in total revenue to the business, there is a chance that the revenue will not have any cost to you apart from the gift card itself. Additionally there are these benefits of having a form of gift card or voucher.
Any business can have a gift voucher or card, as long as you exchange what you do for money then a gift voucher can be supplied. Because you are essentially being asked to ‘hold’ money by the purchaser to ‘give’ to the recipient, there are a few pitfalls you need to avoid. The biggest risk is that gift cards are the favorite way for scammers to ‘wash’ their stolen money, usually in the form of using a stolen credit card information to buy the voucher then spend it before a stop is put on the credit card. While most small businesses in New Zealand aren’t likely to be targeted by professional scammers, you’ll often find people who will only spend a couple of dollars on the gift voucher in an effort to get the rest back in cash to spend elsewhere.
Another point to consider is commercial associations gift vouchers, the ones that are sold by many different members of this group. Depending on your situation you might end up selling vouchers that get spent in other businesses. While you will get reimbursed for the costs it’s still not revenue going to your bottom line, especially important when research shows that a gift voucher user will spend more than what the voucher is worth.
The last thing to consider is the type of voucher to go with. Some businesses prefer to have a single design where you write in or load the a value, others prefer issuing from a range of fixed value cards so a customer may end up with several gift cards instead of the one. Choosing the wrong style could effect how much extra revenue the card generates.
In conclusion, while there is some small risk with issuing gift cards or vouchers, the benefit to your business outweighs it. These are the key things to remember
If you want to learn more about gift vouchers, how to create your own and integrate them in to your business, and what things you should and shouldn’t do with them, keep reading this fine blog. If you want to know more and have the one on one service that ensures you get them exactly right for your business, talk to us at Copy Express.
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