Today is National Use Your Gift Card Day! If you're posting on social media, be sure to tag #UseYourGiftCardDay.
National Use Your Gift Card Day is the perfect time to remind your customers about your policies, formats, ways to buy, ways to redeem, how to check their balance, or even to offer a promo on gift cards.
Gift Card Laws
No, it's not the sexiest topic, but many of your customers won't realize that gift certificate laws can vary drastically from state to state, or that there can be expiration dates, fees or even a cash value associated with some gift cards. For instance, here in Montana, gift certificates can never expire, and once the balance is $5 or less, customers can request the cash value without making a purchase. Federal law now requires that cards must be valid for at least 5 years, which supercedes some of the state laws which have shorter time frames on their books.
Your long time local customers probably know how gift cards work in your area, but those new to the area or out of state friends and relatives might not know some of the ins and outs of gift cards in your state. There's no better day than National Gift Card Day to make sure your policies are in compliance and easily found by your customers on your website.
Paper(less) or plastic?
Physical gift cards are still king in the kitchenware industry, with most customers preferring a tangible or unwrappable gift; however, e-cards are gaining in popularity because of their convenience. Last minute gift givers can still deliver on time with digital gift certificates, even if it's after hours for your physical location. Nearly one third of gift card givers will gift them within hours of purchase! Customers that like to plan ahead will appreciate the ability to schedule a gift certificate in advance. If you offer this service, let your customers know that you can help them cross one more thing off of their to-do lists. If you haven't posted about your gift certificate options lately, or if those options have changed, let your customers know how they can purchase from you!
Gift Certificates By the Numbers
Keeping track of your gift certificate liability can be daunting. Do you track it monthly? Annually? Or perhaps only vaguely and eventually? The accounting side of gift certifcates can be a challenge for small businesses, but they can have a profound affect on your bottom line. Consider this:
- 65% of gift card holders will spend approximately 38% more than the value of the card when they redeem it1.
- Customers holding gift certifcates are 2.5 times more likely to buy an item at full price, according to this study by Forbes
- When you sell a gift certificate to a customer you are essentially receiving an interest free and tax free loan. You pay taxes on gift certificate sales when the gift certificate is redeemed, not when it is purchased!
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