A gift card is simply a prepaid stoned-value money card issued by the retailer. The same can be utilized as alternative to cash payment for any goods or services purchased from the specific retailer or related business. It has been found that customers prefer gifting a gift coupon to others rather than hard cash or an item. Several shopping sites such as Amazon, Flipkart and similar competitors have also introduced the system of gift vouchers, today.
Gift cards online come in two basic formats:
- Electronic Gift Card Number : An electronic gift certificate can be printed out repeatedly. It does not cost the merchant anything to produce it. The gift certificate can be emailed to the buyer, instantly. Online sellers usually use electronic version of the card, and physical cards is a choice depending on marketing goals, capital, and other considerations by the business.
- Physical Payment Card : Physical gift certificate are shipped to the buyers, just like any physical item bought. There would be some cost incurred to print, die-cut and prepare the physical gift certificate. However, these are more substantial and can be circulated in an envelope and easily marketed through offline channels.
Note: The monetary value of the card is fixed. While using this card, if the bill amount costs more than the monetary value of the card, the additional amount needs to be paid by the buyer.
Now that you are aware about these cards and its types, we will list out the ways by which a merchant can market these better to customers.
- Provide Gift Cards on Discount : A merchant can simply market gift coupons at a discount. For example, the retailer can sell Rs. 500 worth gift coupon at Rs. 450. Gift givers get a deal, which motivates them to purchase the gift card, while the receiver gets additional value. The discount can be utilized to move buyers up a denomination as well. For instance, when a buyer adds Rs. 500 worth gift coupons to his/her shopping card, the platform may offer him/her Rs. 700 worth coupons in Rs. 600. Some shoppers will spend the additional 100 rupees. The downside of discounted gift coupons is; if the discount is not planned properly, it can hurt the profit margins.
- Delayed and Discounted Gift Card : A delayed and discounted gift card is aimed to move a sale from an occasion to a slower time of the year, say moving the sale from New Year to the month of February. Such approach can be used to prevent any immediate redemption. For example, when merchants offer discounted gift coupons as mentioned here, buyers will buy these cards at one go, but use them almost immediately to buy other items on the website. Thus, the purpose of benefits by promoting such gift coupons is defeated. Pertaining to delayed and discounted scenario, say a person buys a discounted gift token, but does not use the card until after a specified date, or may not get the additional value until the specific date has passed by. For example, Arjun purchases Rs. 1000 worth coupons in Rs. 900 for flowers delivery, on December 22nd, but the card itself cannot be used for making a purchase until and after February 1. Similarly, Arjun can purchase Rs. 1000 gift voucher at original price, with the promise that if the card’s balance is still the same on February 1, the merchant will provide additional Rs. 50 to the card’s balance. But if the card’s value drops beyond Rs. 1000 before February 1, then no additional balance will be provided. In both the cases, the buyer and recipient receive additional card value.
- Give Gift Coupons as Rewards : Kickback coupons promotions are a way to market gift coupons in a unique manner. Rather can cash-back, the merchant issues a second coupons of a certain value, if the buyer purchases a coupon of a specific amount. For example, Arjun purchases gift coupon of Rs. 1000 and receives a gift coupon of Rs. 100 in return. Sometimes, the second coupon arrives immediately on purchase of the first coupon, or it can be deferred to a latter time period to motivate purchase during a particular month/season.
- Market the Gift Voucher for Charitable Causes : Many people shop for items for donation or charity. Online outlets realize the social conscience of buyers and thus link this notion with retailing. For instance, for every Rs. 500 of voucher purchase, the e-retailer can offer Rs. 20 to a good cause in the name of the shopper. Sometimes charitable organizations help merchants that make donations offers; by sending emails to interested folks or members, and posting information of the gift voucher offer on their company’s site or blog.
- Earn an Amount on Referrals : Suppose Arjun is a customer of a site. He gets a notification from the merchant; informing him that if he brings a referral to buy gift flowers using promotion cards of Rs. 300 on their platform, then he would earn Rs. 20 on each such referral. A unique code will be generated. This code has to be used by Arjun’s referral contact to purchase the referral card of a minimum value of Rs. 300 on the merchant’s site. The referral person on shopping the referral card, shall also earn Rs 20. On confirmation of the purchase, Arjun and his referral contact, will receive Rs. 20 each in their registered account’s wallet.
- Market Gift Voucher s at Other Online Retailers : Merchants sometimes partner with other online retailers to market their promotional voucher. In return, the other retailer receives a percentage of the purchase value of the voucher. For example, the merchant who wants to market a promotional vouher worth Rs. 500 will pay Rs. 20 on purchase of each voucher of Rs. 500, to the site that promotes the voucher. The Rs. 20 will be paid to the promoter only if the purchase is made through its site and not that of the original merchant. This trick to market gift card is very beneficial for both small and large-sized e-retailers.
- Email Marketing of the Gift Cards : Email marketing has a wide reach and is a cost-effective way of communicating with leads and customers. The merchant can easily promote gift tokens via email marketing to new and old customers or even non-members. An attractive email content is required that gives information and benefits of the gift token in question, with a call to action.
- Gift Card Offers for Loyal Customers : “Congratulations! We have credited Rs. 500 in your wallet. Each time you make a new purchase, you can reimburse 15 percent of this added amount from your wallet towards bill payment. This amount expires within 2 months.”- You may have received similar messages, if you have been member for quite a time with an e-retail site. Obviously, you may head to the site immediately to make a purchase using the free money received, before the amount expires.
This trick can be used to market a gift voucher in similar pattern. A voucher of Rs. 500 can be sent to the member, who can use 15 percent of the amount from gift certificate as payment towards each new purchase. But, the voucher has to be used up within 2 months, thus, the member can be prompted to make a number of purchases within this time period.
- Extended Values on Gift Voucher s : For instance, Nirav receives a gift voucher worth Rs. 800 from Arjun, but somehow never gets around using it. It is nearing its date of expiry, yet Nirav does not wish to use it or gift it to someone else. As a merchant, you can contact Nirav and give him an offer that if he uses the card value entirely before the expiry period, then he will receive an additional card of Rs. 200, free-of-cost. Now the card of worth Rs. 200 that he receives can come with a condition of being used entirely on a single purchase, and if not so, the gift coupon cannot be used at all. The merchant should plan intelligently for the free gift coupon it provides to Nirav. Usually the value of this gift voucher should be lower than most of the basic products available on the site, which will prompt Nirav to make a purchase of a higher amount.