888.733.2383 ApplyContact

Select from the filters below to refine the resources that interest you.

Most Popular Topics

Date Range

4 Benefits To Offering Customers Gift Cards

4 Benefits To Offering Customers Gift Cards

Although the need for working capital remains the lifeblood of any small business, many customers prefer to conduct business with gift cards. A company that offers a large spectrum of goods and services for their customers can make shopping for a gift an overwhelming endeavor. This large selection of tangible products has no doubt contributed to the decision-making process of the 70 percent of consumers who plan on buying gift cards in the upcoming months, according to a survey conducted by the Retail Gift Card Association.

While traditional gift certificates can easily perform the job, gift cards are easier to load and reload, have longer life spans due to their plastic material and you can keep them on a display right by the register to attract more customers. If you have the capabilities, consider omnichannel flexibility for gift cards. This includes providing e-gift cards either through your company’s mobile app or through an outside vendor.

Below are four benefits to incorporating gift cards into your business strategy:

  1. It’s an immediate purchase
    When a consumer buys a gift card from your store, you are automatically making a sale regardless of whether the card’s recipient ever takes one step into your store. Many recipients only spend a partial amount of the card’s total and forget to use the rest of the available balance. This is called “breakage,” and it can essentially mean pure profit for your store. However, state laws vary on how to deal with this money, so consult a lawyer or accountant for the details.
  1. Customers buy more
    If a customer receives a $25 gift card for your store, but the product they want is $50, then the individual will typically use out-of-pocket funds to cover the rest of the purchase price. In other words, customers tend to spend more money when they have a gift card with them. According to Giftcards.com, 72 percent of customers will spend on average 20 percent more than is allotted on the gift card. This leads to increased profits as well as satisfied customers.
  1. Build brand awareness
    When a person receives cash in a card, they’re likely to either deposit that money directly into their savings account, or immediately spend it on something they already knew they wanted. In other words, this doesn’t provide an opportunity for small businesses to expand their brand. When an individual who is unfamiliar with your brand receives a gift card, they will immediately be interested in what you have to offer. Even if your store doesn’t offer what the recipient wants, 42 percent of consumers will re-gift the card to someone else. Eventually someone will use the card down the line, and each time it passes hands to someone else, it creates an additional means of expanding your brand.
  1. Create more touchpoints
    By making customers activate the gift card online, you can collect email addresses to add to your mailing list. This will allow you to touch base more often with your customers, which means you’ll be able to send them more sales updates, special offers and promotions. In addition, having the gift card linked to your company’s website means customers will spend more time on there if they are reloading or checking the balance on the card. This can drive additional traffic, and the longer a customer stays on your webpage, the greater the chances he or she will make another purchase. In addition to providing you with more touch points, you can also establish a loyalty program connected to the gift card. This would allow you to tailor sales items and promotions specifically to the customer to ensure a greater return on the relatively inexpensive gift card.


Proud small business lending partner

Customer Care
National Funding's Customer Care representatives are available to ensure that all client issues are resolved in a timely manner.

Customer Care Center Hours
Monday - Friday
7:30am to 4:30pm PT


Address Information
9820 Towne Centre Drive
San Diego, California 92121