The benefit of gift cards for small business owners

Small and medium-sized enterprises (SMEs) are the backbone of any economy and play a vital role in creating jobs, boosting economic growth, and driving innovation. However, running an SME can be challenging, especially when it comes to attracting and retaining customers. This is where gift cards can come in handy. In this blog post, we will discuss the benefit of gift cards for small business owners and how they can help SME’s to grow.  

Gift cards generate increased revenue  

Gift cards are a great way to increase revenue for SMEs. When customers purchase gift cards, they are essentially pre-paying for a product or service that they can redeem at a later date. This means that SMEs can get a cash influx even before the customer has used the gift card.   

Also, research has shown that customers who receive gift cards often spend more than the value of the gift card, resulting in increased revenue for the business.  This is known as ‘up-spending’ and is on average, 40% of the gift card value.  Breakage is another commercial feature of gift cards, where purchased gift cards go unredeemed.  On average 15-25% of gift cards are never redeemed.  

Gift cards attract new customers and retain existing ones

Gift cards are a great way to attract new customers. People are always looking for gifts to give to their friends and family, and gift cards offer a convenient and personalised option. By offering gift cards, SMEs can tap into this market and reach new customers who may not have heard of their business before.  Based on our extensive industry experience, 18% of gift card recipients go on to become loyal customers. 

Furthermore, gift cards are also a great way to retain existing customers. By offering gift cards as a reward or incentive, SMEs can encourage repeat business and keep customers coming back. This is particularly important for businesses that rely on repeat customers, such as restaurants and salons. 

Gift cards can be shaped to meet different business needs 

Gift cards are flexible and can be customized to meet the needs of different businesses. They can be offered in various denominations, can be redeemed for specific products or services, and can have expiration dates. This means that SMEs can choose a gift card programme that best suits their needs and goals.  

Gift cards are a valuable marketing tool 

Gift cards can also be used as a marketing tool. For example, businesses can offer special promotions for customers who purchase gift cards, or they can offer bonus gifts for customers who refer friends and family to their business. By using gift cards in this way, SMEs can drive new business, build brand awareness, and increase customer loyalty.  

In conclusion, gift cards for small business owners are a valuable tool to help them grow and succeed. By increasing revenue, attracting new customers, retaining existing customers, offering flexibility, and serving as a marketing tool, gift cards can help SMEs to thrive in today’s competitive business environment. If you’re an SME owner looking to boost your business, consider offering gift cards to your customers and get in touch with Diggecard to learn more about our gift card solutions for retail, leisure and hospitality and how our expert team can help you.