Responding to the COVID-19 crisis continues to require a lot of creativity. Many restaurants have had to pivot to curbside pickup and delivery-only service, and numerous retail stores have shifted entirely to e-commerce to stay afloat. To stay competitive, many astute small businesses are also turning to a tried-and-true method of driving sales – the gift card.
Consumers have always loved buying gift cards from small businesses. In fact, before the pandemic began, according to Fiserv (NASDAQ: FISV), 74% of consumers were already doing so. And when COVID disrupted small business operations in the U.S., 37% of consumers even began using gift cards to support their favorite merchants in a time of need. Gift cards are a staple for today’s consumer—even amid a global crisis—and small businesses are realizing that the benefits of a well-rounded gift card program extend well-beyond creating a new transaction with a single customer.
There are four unique ways gift cards are helping today’s small businesses:
1. Going Digital
With the pandemic’s impact on in-store sales, small businesses are wisely exploring new ways to reduce points of physical contact. As merchants wait for foot traffic to return, they can offer digital gift cards, enabling customers to support them from afar. Small businesses can combine their physical gift card program with a digital offering through a point-of-sale (POS) platform like Clover.
2. Attracting New Customers and Retaining Loyal Ones
90% of consumers stated that if they received a gift card from a small business they’ve never visited, they would redeem the gift card and return to shop there again. Gift cards help small businesses deepen customer loyalty and acquire new customers, such as when faithful customers give gift cards to family and friends.
3. Growing Sales
Although customers tend to buy a gift card for a specific amount, many consumers will spend far more than the value of that gift card when making a purchase. Gift cards generate increased store and web traffic and inspire customers to browse other products. Once a customer has started shopping with a gift card online or in-store, they often exit with a basket of items that costs more than the gift card’s value.
4. Marketing Your Brand
When you design a gift card to match your company logo and brand, it works as a marketing tool in the customer’s pocket. As consumers purchase more gift cards to give to their friends on birthdays, holidays, graduations, and other special occasions, your brand continues to be showcased to new customers.
Thomas Niedbalski is vice president of Gift Solutions at Fiserv. With more than 27 years of progressive leadership in closed-loop prepaid solutions, Tom is a thought leader and a visionary working to transform the way brands leverage branded currency to engage with their customers. Previously he was a co-founder of Transaction Wireless. Building a leading digital gift card distribution and marketing platform, Tom helped develop and execute a robust digital platform strategy positioning Transaction Wireless as a leading provider of digital gift cards and prepaid services across emerging and mobile channels. First Data (now part of Fiserv) acquired Transaction Wireless in 2015.\