Boosting Online Sales with Gift Cards

Gift cards may have been considered an impersonal gift at one time, but it is now one of the most requested gift by all ages and backgrounds. Perhaps it’s due to the fact that retailers have trained customers to use them. It’s hard to refute the convenience afforded by gift cards to both giver and recipient. Plus, the advent of online gift codes have experienced a boost in sales from last minute shoppers. A gift card program can help brand your store, so think of ways to use it as both an incentive for new customers and a reward for existing loyal patrons.

How It Works

Many shopping cart solutions available today can generate gift cards or certificates (codes). A sender can order a “virtual” gift card to be sent directly to a recipient through encrypted email. Unlike a physical gift card, a virtual gift card has a unique code (numbers and/or letters) instead of a barcode or magnetic strip for tracking purposes. Online gift cards can be any amount a sender chooses, or in denominations, depending on the solution you use.

When the recipient of a gift card chooses to make a purchase and pay with the gift card, he will enter the unique virtual gift card code into the designated field during checkout. Gift cards typically don’t have an expiration date and any remaining credit can be used at a later date.

Benefits of Gift Cards

For the customer, it’s all about convenience. For the merchant, the benefits are reflected in the bottom line. Research shows that most customers spend an additional 40-50% of the gift card’s value. That means a customer redeeming a $200 gift card, is likely to spend up to $300 in total purchases. If she fails to use up the card’s full value, the remaining balance automatically becomes extra earnings. In addition, gift cards allow your customers to help you promote your store by giving gift cards to those new to your brand.

How to Maximize Gift Cards

Take advantage of online gift cards by giving your customers a reason to buy them. Try offering incentives for each purchasing, like adding a bonus credit of $5 for every $50 gift card bought. You can get more out of your gift card program by combining it with other programs, such as customer rewards, or employee performance recognition programs. To add personality to the cards, provide an option that allows senders to add special notes to their orders.

Be sure that the gift cards appear as cross-sell items on your shopping cart page, and include it in your marketing communications (customer emails, newsletters). More importantly, ensure that they are given sufficient visibility on your homepage, visible to customers who are in a hurry to complete their shopping list. Try offering gift cards to salvage an abandoned cart, if you know the visitor was shopping for a gift.

EFS Checklist – Gift Cards and Gift Certificates (PDF)

By: Shirley Tan


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