Profit with Gift Cards and Gift Certificates

It's not easy to figure out what family and friends would like for their birthdays -- and it's harder to locate those special items. Gift cards are an excellent tool to help your customers while profiting from the frustration of gift buying.

The popularity of the gift card -- the modern version of the gift certificate -- continues to grow. According to the National Retail Federation, shoppers spent nearly $25 billion on gift cards during the 2006 holiday season. While gift certificates are often considered a last resort, modern gift cards are marketed as a fashionable way to offer choice to the recipient. The cards are also easy to display near cash registers.

To establish your own gift cards, first you need to determine the style of card; this should match your store's image and perhaps even align with the decor. It should present your logo and the name of your business. The right packaging and design should invite customers to take a closer look. In fact, many stores offer a variety of card designs and provide a corresponding envelope to enhance the look of the gift.

It is easiest and safest for your store and your employees to have the cashier activate the cards. You can either print cards in various denominations or have the cashier issue the amount as requested by the customer.

If, however, you handle a high-end clientele and prefer the traditional look of a gift certificate, design will need to be considered in much the same way: with your business image in mind. Again, you can offer specific denominations or fill in the desired amount at the time of purchase.

Some keys to selling gift cards or gift certificates successfully:

1. Vary the denominations in order to offer the buyer adequate choices.
2. Make sure that all personnel are well versed on how the gift card or certificate is to be issued and redeemed.
3. Use a credit system for the remaining amount, whether the card is automatically updated or it is done by hand. Again, make sure all staffers know the system. It is typically easier and less time-consuming to update a gift card than to issue a new one in the updated amount.
4. Remind buyers to save the receipt in case of a defective card.
5. All cards should redeem all items in your store that are of equal or lesser value to the card's amount. Don't put stipulations on what a card may be redeemed for or when it may be used. The card or certificate should be treated like cash and be without an expiration date.
6. Number your cards or certificates for recordkeeping purposes and to avoid fraud.
7. If you allow gift cards on your website, ask for more information from the buyer. Scammers have been known to write down card numbers and order items online, which is theft. However, if you have the name of the purchaser or some identification number, you can determine the card's validity.

While gift cards and certificates may not appear to move inventory quickly, they do allow those shoppers who cannot find the right gift to leave your retail establishment with a purchase.