Gift Cards - Fiserv

Best practices forsmall businessGift Cards

Gift Card ProgramadvantagesYou’ve wisely chosen or are considering a gift card program for your business.A well-run gift card program connects you to your customers in ways like noother product can. This allows you to run the same kinds of marketing andpromotions as national retailers to grow your sales at a minimum cost.Key benefits Deliver consumer demand for convenience Build brand recognition and loyalty Promote product and service awareness Reduce cash returns Drive foot traffic into existing locations Reduce fraud Acquire new customers Use as a simple, powerful marketing tool Drive sales and revenue growth Generate repeat business Increase average ticket spend2 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSBEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 33BEST

Boosting thetransactionAccepting gift card payments can mean great profitability for your smallbusiness, because there are two sales tied to each gift card transaction(one for the giver and one for the receiver) and you can simultaneouslyreward loyal customers while bringing in brand new ones.We’ll help you answer some key questions:41%of gift card recipients say theywould never have visited a store ifthey hadn’t received a gift card.Source: First Data 2018 Consumer Insights Study, October 2018. Which “occasions” should I include in my assortment? How many different card designs should I offer? What style of design will appeal to my audience?3xaverage amount of tripsthat consumers take tospend their gift cards51%of gift card recipients say theystarted shopping at a storemore frequently after receivingand redeeming a gift card59 average amount thatconsumers spent over theoriginal value of a gift card55%amount of gifting budgetconsumers say they willspend on gift cardsSource: First Data 2018 Consumer Insights Study, October 2018.4 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSBEST PRACTICES FOR SMALL BUSINESS GIFT CARDS 5

Gift Card ProgrambasicsAlways remember that your card designs should reflectyour brand and customer base.60/40 RuleSixty percent of your gift cards stock should be Birthday and“Everyday/All Occasion” cards. Forty percent of the spaceshould be allocated to occasion cards, including Weddingand Congratulations.The importance of new designsGift cards are no different than other merchandise in yourstore, your customers want fresh new looks and options.We recommend refreshing your assortment at leastonce a year.Here is what we know:17%of consumers say they won’tpurchase a gift card, if theright occasion isn’t available10%of consumers say they won’tpurchase a gift card, if they don’tfind an appealing designSource: First Data 2017 Consumer InsightsStudy, September 20176 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSTipCards can be dual purposeConsider creating a gift card that is dualpurpose to increase shelf life. For example,instead of offering a Valentine’s Day card witha heart message, create a card with “Love” ora simple heart.BEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 77BEST

How to track yourgrowthNew program?Document the performance of your prior program (e.g., gift certificates,bonus dollars) prior to launching.Is your program delivering the right percentage of sales?Your gift card program should generate 1–4% of your revenue. New gift cardprograms need 1–3 years to reach this range.TipWatch It GrowWhat category opportunities are there?Make a list of all the occasions that your customers might celebrate withcards. A florist may have a different set of designs and incentives than aquick service restaurant.Your gift card program should be growingat the same rate as your revenue.8 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSBEST PRACTICES FOR SMALL BUSINESS GIFT CARDS 9

CreatingpromotionsCustomer loyalty is something you earn over time. While a varietyof factors influence whether or not a consumer becomes a loyalcustomer, we have found that gift cards are excellent tools tohelp build loyalty because they encourage customers to:1Visit your stores more frequently2Try new products3Try more expensive or higher margin items4Spend more money5Choose a particular brandFor example, by offering gift cards as “Incentive Cards,” you canreward customers who perform certain desirable actions, such aspurchasing a specific product.10 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSHere is what we know:42%of respondents reportedspending more than theyhad originally planned at aparticular merchant becauseof the incentive offered.Source: First Data 2017 Consumer InsightsStudy, October 2017.61%percent of respondents said that theyprefer to receive a gift card over couponor bonus bucks. Reward them for theirloyalty and frequency.Source: First Data 2018 Consumer Insights Study, October 2018.BESTBEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 1111

CustomerrewardsUse gift cards as a way to drive spend and specific consumer behaviors.TipShow AppreciationUse gift cards as a “Thank You”for social media shout outs.Friends and familySpending incentivesMerchandise offersUse gift cards to rewardcustomers who bring friendsand family to your business(e.g., Bring five friends andget a 10 gift card). Your salesfrom five new customers will farexceed your investment.Run promotions that includegift cards as incentives,(e.g., Buy a 25 gift cardand receive a 5 card free;Spend 200 and receive a 20 gift card).Offer a gift card for purchasesover a certain amount or forbuying multiple products.Customer engagementCustomer rewardsFoot trafficUse them as social mediacontest prizes. Seven out of10 consumers say they’veplayed a game on socialmedia*. Engage customers withquizzes and contests and usegift cards as a reward. It willhelp drive frequency to yourpage and help you build alarger fan base.Use them as a reward forconsumer behavior (e.g., If acustomer provides a greatsocial media “shout out” to you).Use them to drive behavior onlow-traffic days (e.g., “Comein on Tuesday and get a 5 gift card with purchase”).*12 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSUse them as gift-with-purchaseincentives to drive sales ofspecific products when you aretrying to move cebook-contests/BESTBEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 1313

Merchandising StorebasicsIn addition to keeping displays neat, organized, and full at all times, and having plentyof visual signage that promotes your gift card selection, here are some tips:Create visual cuesProvide value optionsInclude a free carrierRemind your customersthroughout the in-storeexperience that you sellgift cards. Place gift cards atthe POS, in changing rooms,on trays, or a carry-out bag.Allow customers to choosethe gift card value either byenabling them to activateany amount on their gift cardat the register ( 5 to 500)or offering numerous valueincrements within a specifieddollar range (e.g., all 5increments between 5 and 500).Offer a few options of brandedpaper stock gift card carriers,so that customers can choosetheir favorite. Your carrierscan be very inexpensive(e.g., a paper sleeve) or if youare a luxury merchant, offer anicer, more elegant carrier,like a gift box or tin that reflectsyour brand well.14 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDSTipSay Yes to PackagingPackaging for gift cards can be a greatincremental sale and gives you additionalopportunities to create brand awareness.BESTBEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 1515

Employees Are the Secret tosuccessThe success of any program is based on adoption. It’s just as important to geteach of your store employees’ excited about the program as it gets your customersto participate. Appoint a “Gift Card Ambassador” for your store(s)TipDo It With FlairProviding employees buttons, signage,and bag stuffers that promote your businesshelps ensure that gift cards become a partof each and every sale in your store.16 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS16 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS M ake sure employees understand the benefits of gift cards for customers(e.g., Convenience, allow the customer to choose what they want) O ffer small incentives to employees based on executing your gift card plan(e.g., Setting the goal of selling 50 cards this week) K eep gift cards handy and promote them (e.g., Asking customers if they wouldlike to buy a gift card alongside another purchase) Ensure your employees know about digital gift card options, if availableBESTBEST PRACTICESPRACTICES FORFOR SMALLSMALL BUSINESSBUSINESS GIFTGIFT CARDSCARDS 1717

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8 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS 9. BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS 11 61% . nicer, more elegant carrier, like a gift box or tin that reflects your brand well. 14 BEST PRACTICES FOR SMALL BUSINESS GIFT CARDS BEST PRACTICES FOR SMALL