With supply chain issues stressing physical inventory and inflation running high, consumers are turning to gift cards to fill the gap and stretch their spending power. According to a recent consumer survey from Fiserv, 58 percent of consumers said gift card promotions are motivating them to buy more gift cards during this inflation period. This follows a holiday season in which supply chain issues drove 29 percent of consumers to purchase more gift cards than in previous years.
For retailers, gift cards have long been a tried-and-true offering based on their ability to generate revenue, foster customer loyalty, and strengthen brand recognition. Payment interactions are a gift-wrapped opportunity for retailers to promote their brand, maximize customer engagement, and boost sales.
With economic factors driving consumers to purchase more gift cards than ever before, it’s important that businesses keep their gift card programs fresh and relevant, and provide customer incentives that keep their gift cards top of mind. Taking that into consideration, here are four creative ways retailers can use gift cards to create positive customer experiences and drive sales:
- Milestone events: It’s common for consumers to give gift cards during the holiday season and on birthdays, but retailers should consider promoting the use of gift cards for common milestone events such as back-to-school, graduation, Mother’s Day and Father’s Day, and even for corporate milestones to show appreciation towards employees. Seventy-two percent of consumers see gift cards as appropriate gifts for milestone events, with graduation viewed as the most appropriate time to give a gift card.
- Creative promotions to motivate consumers: Purchasing a gift card is more than simply loading cash onto a card for someone else. Merchants can strengthen customer bonds by offering discounts, bonus cards, physical gifts, and other incentives. When asked what type of promotion would motivate them to buy a gift card, consumers indicated that a gift card bonus (i.e., buying a $50 gift card and getting an additional $10 for free) would be their biggest motivator.
- Omnichannel opportunities: While most consumers are accustomed to seeing in-store kiosks with physical gift cards, digital gift cards are becoming more popular due to their accessibility and the widespread adoption of digital wallets. Buying and redeeming a gift card online should be simple, with similar promotional opportunities to their physical card counterparts. Retailers can even deliver digital gift cards via instant messaging and social media apps to further digital promotions throughout the year.
- Charitable giving: There's no shortage of options for businesses that want to use gift cards for charitable giving. Companies and individuals can purchase gift cards as part of their corporate social responsibility programs or to donate to nonprofit organizations. For example, Fiserv works with a national bakery-café which gives 10 percent of gift card proceeds back to a prominent nonprofit organization.
For retailers, gift cards are a great way to enhance each customer’s brand experience. Beyond traditional gift giving, creative retailers can take advantage of gift cards by incorporating gift card incentives into marketing campaigns or leveraging gift card sales to support nonprofit organizations, just to name a few different options. Adding elements of creativity and progressive thinking can help retailers increase sales while building and strengthening customer relationships.
Tom Niedbalski is the vice president of gift solutions at Fiserv, a global fintech and payments company with solutions for banking, global commerce, merchant acquiring, billing and payments, and point-of-sale.