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9 Errors Businesses Make With Gift Cards

Gift cards have emerged as an indispensable tool for businesses to stimulate sales, build customer loyalty, and generate brand recognition. However, there are common mistakes that businesses often commit, jeopardizing the potential of this marketing strategy.
Frederik van Lierde - Feb 08, 2021
9 Errors Businesses Make With Gift Cards
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Introduction

In a world where competition is fierce and consumers are increasingly spoilt for choice, businesses must provide exceptional customer experiences and value propositions to stand out. Gift cards offer one such avenue, allowing customers to share their love for a brand and attracting new consumers to the business. However, businesses often make errors in their gift card programs that undermine the cards' effectiveness. Let's explore five common mistakes and how to rectify them.

Error 1: Poor Visibility and Accessibility

A commonly overlooked mistake is poor visibility and accessibility of gift cards in the store or online. Customers may be interested in buying gift cards, but if they can't find them easily, they're likely to give up and move on.

Consider creating a dedicated space in your physical store for gift cards. This area should be easily visible to customers as soon as they walk in. Additionally, staff members should be trained to inform customers about the availability of gift cards, and their potential uses.

On your website or online store, ensure gift cards are prominently displayed on the homepage. Also, include a link to purchase gift cards in the site's main navigation bar and footer. Make the purchasing process as straightforward and user-friendly as possible.

Error 2: Overcomplicated Redemption Process

An overly complex redemption process can turn an exciting gift into a frustrating experience. Businesses often overcomplicate the redemption process, with excessive terms and conditions, intricate online redemption systems, or limitations on what can be purchased with the gift card.

Remember, a gift card should provide a seamless shopping experience. Hence, streamline the redemption process both in-store and online. The terms and conditions should be clearly printed on the card, and the redemption process should be explained to the customer at the point of purchase.

Error 3: Lack of Personalization

The third mistake businesses make is failing to offer personalized gift cards. In a world where personalization is becoming increasingly important, businesses must keep up with this trend to meet customer expectations.

Personalized gift cards that allow customers to include a personal message or select unique designs can make the gift card feel more special and personal. If feasible, offer customers the option to customize the design of the gift card themselves. This could include adding their own photos or choosing from a range of pre-designed options that suit different occasions, like birthdays, weddings, or holidays.

Error 4: Inadequate Expiration Policies

A restrictive expiration policy can discourage customers from purchasing gift cards and can leave a bad impression if a gift card is declined because it has expired. Overly stringent expiration policies can cause resentment among customers and create a negative perception of your brand.

To counter this, consider extending the validity of your gift cards or, better yet, eliminate expiration dates altogether. This not only encourages customers to buy gift cards but also fosters goodwill towards your brand.

Error 5: Neglecting Online Platforms

With the world becoming increasingly digital, neglecting online platforms in your gift card program is a critical mistake. Businesses often focus solely on physical gift cards and neglect the potential of e-gift cards.

E-gift cards provide a convenient alternative for customers who prefer online shopping. These digital cards can be purchased and sent directly to the recipient's email, making them an excellent choice for last-minute gifts. To capitalize on this, businesses should promote their e-gift cards through their digital channels, including social media, email marketing, and their website.

Error 6: Failing to Make Gift Cards "Gift-Ready"

Another crucial error businesses make when offering gift cards is not making the cards "gift-ready". A plain gift card handed out without even a cardholder can be underwhelming. It detracts from the "gift" aspect of gift cards and doesn't motivate repeat purchases.

To rectify this, businesses must focus on presenting their gift cards in a more appealing and gift-worthy manner. This could involve placing the gift card in a specially designed box, pouch, or cardholder. By doing so, you can enhance the perceived value of the gift card and transform it into a truly attractive gift.

If you're looking to elevate the presentation even further, consider adding a touch of elegance with a ribbon or bow, or by enclosing the card in a decorative paper bag. These small enhancements can significantly enhance the gift-giving experience and leave a lasting impression on the recipient, increasing the chances of repeat purchases and customer loyalty.

Error 7: Waiting Until Holidays or Busy Shopping Seasons to Promote Gift Cards

A prevalent error that businesses fall into is waiting for holidays or peak shopping seasons to start promoting their gift cards. Although these times are indeed popular for gift card purchases, limiting your promotional efforts to these periods is a missed opportunity.

Rather than waiting for the holiday rush, businesses should implement and promote gift cards well in advance. Make them a standard part of your product or service offering, not just a seasonal special.

A useful strategy could be to include a link to your gift cards in your email signature. This way, the option to purchase a gift card is consistently in front of your customers, ready for when they need it.

Remember, gift cards aren't only for holidays. They're perfect for a multitude of occasions, like birthdays, anniversaries, or just as a thoughtful gesture. Ensure your existing customers are aware of this versatility. Promote gift cards year-round, and you'll create a constant stream of opportunities for your customers to introduce new people to your business.

Error 8: Neglecting Investment in Gift Card Marketing

A major misstep businesses often make with gift cards is failing to invest in marketing them properly. Simply offering gift cards isn't enough to draw customers in to purchase them. Like any other product or service, a gift card program requires active promotion to ensure visibility and engagement.

Take a quick search on Google for a phrase like "massage gift card in London". You'll find that the results are dominated by platforms such as Groupon, Truly, and Virgin Experience Days, rather than local businesses. These platforms succeed in retaining customers (often at the cost of your profit) by investing in their visibility.

To avoid falling into this trap, it's essential to allocate resources to actively promote your gift card program. This can involve investing in search engine optimization (SEO) for your gift cards, or using paid advertising on platforms where your customers are active.

Additionally, don't forget to leverage your social media platforms. Regular reminders about your gift card program can keep it at the forefront of your followers' minds, making them more likely to consider purchasing one when the need arises. A strategic and consistent investment in marketing can go a long way in making your gift card program a success.

Error 9: Failing to Incorporate Loyalty Program into Gift Cards

One of the most significant oversights businesses commit with gift cards is not integrating them into their loyalty program. By neglecting to include loyalty benefits with gift card purchases, businesses miss out on an incredible opportunity to multiply the impact of their gift cards.

A highly effective solution is to be smart with loyalty rewards on your gift cards. If you already have a loyalty program in place, consider extending loyalty points or rewards to both the buyer and the receiver of the gift card.

This strategy can create a viral effect. The buyer is incentivized to return and potentially purchase more gift cards for other friends or family members to earn more loyalty rewards. At the same time, the recipient, now a new customer, is likely to do the same for their network, thus propagating the cycle.

In this way, integrating your loyalty program with your gift card offering can not only boost repeat purchases but can also attract new customers to your business, enhancing the overall impact and reach of your gift card program.

Conclusion

Gift cards are an essential tool for increasing sales and customer loyalty, but their potential can be compromised if not correctly utilized. By ensuring high visibility and accessibility, simplifying the redemption process, personalizing gift cards, adopting fair expiration policies, and leveraging online platforms, businesses can maximize the benefits of their gift card program and avoid common pitfalls.

As with all business strategies, it's crucial to listen to customer feedback and adapt your gift card program accordingly to ensure it remains effective and continues to meet the needs of your customers.