Sales Tools That Provide Pre-Paid Cash Flow
What other sales tools do you know of that will allow you to Write Yourself a Loan?
Aside from the cost of the card, which is around $1 for a full color custom design, that is your TOTAL cost, no matter what the face value.
If you sell a gift card with $500.00 loaded on it, it has only cost you a buck at the point of sale. You have gotten $500.00 in your register and it is yours and your COGS (cost of good sold) for that card was 1/5th of 1 percent.
Do you begin to see the POWER of gift cards?
Granted, on the surface, what you have done is taken in $500.00 as, an accountant would phrase it, “a short term contingent liability”, however this does not take into account:
2.) Uplift, customers usually spend more than the face value of the card
3.) COGS. If your COGS is 35%, that $500 card, assuming NO breakage, actually cost you $175.00. This leaves a Net Profit of $325.00 before the cost of the gift card program, which is minimal.
Therefore, the “Contingent Liability” mentioned above is $175.00.
Need short term capital? The quickest and easiest way to raise it is with a gift card promotion. With the COGS being 35%, you just closed a no interest loan of 65% of the total face value of all the cards sold before breakage & uplift are even taken into account…
Oh, did I mention the loan doesn’t have to be paid back?
Think about it…
No. There is nothing to think about. Get those cards on the street now!
Share a comment or ask a question...
Do you have a question that you would like to ask to gain more insight?
Write your thoughts below and I will be sure to get back to you.