15 Benefits of POS Gift Cards for Retailers

If you’re wondering whether gift cards could be a good fit for your business, you’re in the right place.
Gift cards have been one of the most desired gifts for over a decade, with 59% of people specifically asking for them. This popularity makes them an invaluable tool for retailers looking to attract and retain customers. One of the best ways to leverage this demand is through POS gift cards. These cards can boost sales, build customer loyalty, and streamline operations. Let’s dive into the many benefits of POS gift cards for retailers.
What Gift Cards Mean for Your Business: A Versatile Marketing and Sales Tool
For a business, a gift card is more than just a prepaid card. It’s a marketing and sales tool. It promises future sales and can bring in new customers who might not have visited your store otherwise. Gift cards also improve cash flow by providing immediate revenue upon purchase. In Australia, the gift card market is booming, with a projected growth rate of 16.3% annually from 2023 to 2030. Plus, they increase brand loyalty and customer retention, as people often spend more than the card's value. Overall, gift cards are a powerful asset that can drive growth, enhance the customer experience, and streamline financial operations.
15 Benefits of POS Gift Cards for Retailers
1. Increased Sales and Revenue
Gift card recipients usually spend more than the card’s value. According to Forbes, 61% of consumers often spend 20-50% extra. So, a $50 gift card can turn into a $60-$75 purchase, boosting your average transaction value. This happens because customers see gift cards as free money, encouraging them to splurge a little more than they usually would.
2. Enhanced Cash Flow
Gift cards provide immediate cash flow. Customers pay upfront, even if they redeem the card later. This is especially useful during slow seasons, giving you a financial cushion to manage expenses better. Retailers can use this upfront revenue to reinvest in their business, manage inventory, or cover operational costs.
3. Customer Acquisition and Retention
Gift cards attract new customers. They’re often given as gifts, bringing new shoppers to your store. Once these new customers experience your products, they’re likely to return, increasing your customer base. They also foster loyalty among existing customers. People who receive gift cards from friends or family are more likely to become repeat customers.
4. Promotion and Marketing Opportunities
Gift cards are great marketing tools. Use them as rewards for loyalty programs, referral incentives, or contest prizes. This boosts sales and increases brand awareness and engagement. Seasonal promotions with holiday-themed gift cards can also drive sales during peak seasons. You can also use gift cards in promotional campaigns to draw attention to new product launches or special events.
5. Reduced Returns and Exchanges
Gift cards reduce the burden of returns and exchanges. Customers with gift cards are less likely to return items, as they can choose what they really want, making operations smoother. This not only reduces the hassle and cost associated with returns but also ensures higher customer satisfaction as they are getting exactly what they want.
6. Data Collection and Customer Insights
POS systems with gift card functionalities let you gather data on customer preferences and behaviour. Analysing this data helps tailor marketing strategies and inventory management, guiding future stocking decisions and promotions. By understanding what products are popular among gift card users, retailers can optimise their inventory and marketing efforts to better meet customer demands.
7. Improved Customer Experience
Gift cards enhance the customer experience by offering choice and convenience. They’re perfect for last-minute shoppers and can be redeemed online, providing flexibility for tech-savvy customers. This level of convenience makes shopping easier and more enjoyable, leading to higher customer satisfaction and loyalty.
8. Cross-Selling and Upselling Opportunities
Gift card recipients often explore different product categories, presenting cross-selling and upselling opportunities. A customer using a gift card for clothing might also buy accessories or shoes. POS systems can suggest complementary products during checkout. This not only increases the average transaction value but also helps customers discover new products they might not have considered otherwise.
9. Strengthened Brand Loyalty
Gift cards strengthen brand loyalty. When customers buy or receive a gift card, they associate it with a positive brand experience, leading to repeat purchases and long-term loyalty. Branded gift cards serve as a constant reminder of your store, keeping your brand top-of-mind for customers.
10. Cost-Effective Customer Acquisition
Gift cards are a cost-effective way to acquire customers compared to traditional advertising, which can be expensive. They’re cheaper to produce and distribute, making them a smart strategy for expanding your customer base. Plus, the tangible nature of gift cards often leads to a higher redemption rate compared to other promotional methods.
11. Customisation and Personalisation
Modern retail POS systems allow for customisable gift cards, adding a personal touch. Branded gift cards with festive designs or personalised messages make recipients feel special, enhancing customer relationships. Personalization options can also include the ability to add a recipient’s name or a custom message, making the gift feel more thoughtful and unique.
12. Reduced Fraud Risk
POS gift cards have security features that reduce fraud risk. Unlike paper certificates, digital gift cards can be tracked and monitored, minimising unauthorised use. This protects both retailer and customer, ensuring a safe and trustworthy transaction process. Advanced POS systems can detect and prevent fraudulent activities, giving both retailers and customers peace of mind.
13. Flexibility and Versatility
Gift cards are flexible and versatile, usable in-store and online. Offering various denominations caters to different budgets, making them an attractive option for a wide range of customers. They can also be used in multiple locations, allowing customers to redeem their gift cards at any of your store branches, providing a seamless shopping experience.
14. Encouraging Repeat Visits
Gift cards encourage repeat visits. Customers need to return to redeem them, giving retailers multiple opportunities to engage and impress them, showcasing new products and reinforcing a positive brand experience. Each visit increases the likelihood of building a long-term customer relationship.
15. Boosting Employee Morale
Gift cards can also boost employee morale. Use them as incentives for achieving sales targets or recognising outstanding performance. This motivates employees, fostering a positive work environment that translates into better customer service and increased sales. Happy employees are more likely to provide exceptional service, which in turn enhances customer satisfaction.
Additional Benefits and Considerations
Corporate Gift Cards
Offering corporate gift cards can open up a new revenue stream. Businesses often purchase gift cards in bulk for employee rewards, client gifts, or promotional giveaways. By targeting corporate clients, retailers can increase their sales and reach a broader audience.
Digital and Physical Gift Card Options
Providing both digital and physical gift card options caters to different customer preferences. Digital gift cards can be emailed directly to recipients, offering convenience and instant delivery. Physical gift cards, on the other hand, provide a tangible gift that customers can hand over in person, adding a personal touch.
Seasonal and Themed Gift Cards
Creating seasonal and themed gift cards can drive sales during specific times of the year, such as holidays, birthdays, or special events. Limited edition designs can create a sense of urgency and encourage customers to purchase gift cards as unique gifts.
FAQs About POS Gift Cards
Can gift cards help reduce returns and exchanges?
Yes, gift cards can reduce returns and exchanges as recipients have the flexibility to choose what they truly want, resulting in fewer unwanted items being returned.
How can gift cards be used as a marketing tool?
Gift cards can be used in various marketing strategies, such as rewards for loyalty programs, referral incentives, contest prizes, and seasonal promotions. This increases brand awareness, customer engagement, and sales.
Are digital gift cards secure?
Yes, digital gift cards come with built-in security features that reduce the risk of fraud. They can be tracked and monitored through the POS system, minimising unauthorised use.
How do gift cards encourage repeat visits?
Gift cards encourage repeat visits because customers need to return to redeem them. This gives retailers multiple opportunities to engage with customers, showcase new products, and reinforce positive brand experiences.
Can gift cards be used across multiple channels?
Yes, gift cards are versatile and can be used in-store and online, providing a seamless shopping experience for customers.
Bring Numerous Benefits
Incorporating POS gift cards into your retail strategy can bring numerous benefits, from increasing sales and enhancing customer loyalty to providing valuable marketing opportunities and improving cash flow. Leveraging the advantages of gift cards can create a more engaging and profitable shopping experience for your customers. As the retail landscape continues to evolve, POS gift cards remain a versatile and effective tool for driving growth and success. Whether you're looking to attract new visitors, reward loyal customers, or boost employee morale, gift cards offer a practical and impactful solution for retailers of all sizes.
If you’re looking to enhance your retail operations and harness the benefits of POS gift cards, POSApt is here to help. Our expert team provides reliable POS solutions designed to boost sales and improve customer loyalty. Whether you run a small store or a large retail chain, we can assist you in implementing a straightforward gift card program that drives growth. Contact POSApt today to discover how we can support your business!