CRM Marketing Using Gift Cards, Why They Work So Well

Gift cards are a “Magic” ingredient in your CRM Marketing brew, capable of adding customers to your base, keeping those and the ones you already have and making more profits than ever by employing such concepts as “uplift”, “breakage”, “cycling”, “agreement” and more.

Some of the many reasons and advantages that merchants should offer gift and prepaid cards:
  • Gift cards will help you increase your customer base. They create new customers out of the recipient.

  • Gift cards will help you retain your existing and additional customer base. They can be used as loyalty rewards cards to keep track of spending and be used to load rewards that have been earned.
  • Gift cards, when used, increase your average ticket. Customers usually spend more than the face value of the card. This benefit is referred to as “Uplift”. Just by issuing a gift card you can guarantee at least a 20% increase in profits.
  • CRM Marketing using gift cards keep your sales in the store as they can be employed in refunds. The profit margins are held intact and even enhanced due to breakage and uplift.
  • Gift cards offer a benefit referred to as “Breakage”. By and large, 20% of the face value of cards issued goes unredeemed. That means extra profits for your business.
  • Gift cards are much easier to merchandise than gift “certificates”. They are more secure than “certificates” in that they are practically impossible to counterfeit.
  • Gift cards build brand recognition and brand loyalty. They are referred to in the industry as “Walking Billboards” because they promote your company each time a customer’s wallet is opened and creates "top of the mind awareness" that I discuss in the loyalty marketing portion of the site. This gives a merchant a competitive edge.
  • Gift cards make purchases easy. They are easy to track in that most vendors offer web tracking through a crm marketing system. Through this same system you are also allowed to recharge and provide refunds utilizing the same card.
  • CRM Marketing Using Gift cards enhance a business’ image, gives a degree of “modernity” cost effectively. They cost about a dollar each however, the benefits far out way the initial investment due to uplift, breakage, and all the profitable reasons outlined on this page.

If you aren’t using gift cards in your CRM Marketing, perhaps these impressive statistics will compel you to reconsider:

54 percent of respondents received gift cards for the 2005 holidays. Nearly a year later, 19 percent of the gift-card recipients have not used one or more of the cards received. — Consumer Reports

Gift cards accounted for over $26 Billion in during the 2007 holiday season in America. During that same year, 2 out of 3 people purchased or received gift cards.

Research shows that retailers switching from paper gift certificates to gift cards increase the amount they sell by 50-100%. —

The average recipient spends 20 percent more than their card's initial value. Christmas Eve 2001, a major retail home improvement chain sold 580,000 gift cards in 9 hours for a total value of $21 million. The $100 cards produced an average sale of $152, creating a 52% ticket lift.— The Wall Street Journal

When a card is used in a redemption transaction, the average order value is 31% higher than the merchant's average order -Datamark Technologies

Gift cards accounted for 10-13% of retail sales during the 2004 holiday season.— The Wall Street Journal

Gift cards are the most popular gift in the U.S.. The gift card industry has grown to be a $35.5 billion industry and will surpass $5 billion by 2010 (“Packaged Facts” report 2006)

Customers are 10x more likely to by a gift card vs a paper certificate.

But all these wonderful things will not take place unless you can get them off the racks and in your customer’s wallets, purses and pocketbooks. They don’t call them “Walking Billboards” for nothing.

Take a look at some of the creative ways you can use gift cards as a means to ignite your CRM marketing efforts:

Have A Great Idea or Story You Would Like To Add?

Have you tried some of the ideas found on this site? Do you have a great idea of your own? Share it!

Let us know all the details of what you did, the before and after results, pictures of your campaign, and/or anything else that you can think of that could possibly inspire someone else.

If your submission is the best, we would Love to Buy You Lunch! We will be choosing winners 2x per month, so make it good.

If all of this has made sense to you and you would like to get your CRM Marketing Program started, immediately contact us and we will be glad to help you get your business on the road to Profiting More by Building Better Relationships with your customers!

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“I would recommend this program to absolutely anyone because it has definitely created loyalty! There is so much competition in larger cities and when we opened our second location in Burlington, IA we needed to do something to set our bakery apart. I can think off the top of my head at least 15 customers who eat here 4 days a week just because of the card, where as before they would come only once a week. It has really worked well for us and has created a word-of-mouth to where we don’t even have to “sell” it anymore. It has been a win-win for both our business and our customers.”
* Martha Wolf
The Ivy Bake Shoppe & Café