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How to Set Up Gift Cards for Your Business

April 17, 2020
Written by Nextdoor Editorial Team
April 17, 2020 | Written by Nextdoor Editorial Team

As a business owner, you’re constantly on the lookout for ways to improve your company. How can local marketing efforts reach further? How can you reduce costs? How can you increase customers? And how can you accomplish this with the limited amount of time in a day? 

Asking and answering these questions are how small businesses grow. 

It’s also how you get better at separating worthwhile ideas from potential time pitfalls. Take gift cards, for example. You’ve already identified that gift cards are a worthwhile investment to boost cash flow. Now, it’s time to put the idea into practice.

Thus, this guide is here – to help you set up gift cards for your business.

 

Why Gift Cards Are Right For Your Business

During this uncertain time of COVID-19, where businesses are struggling to keep up with the decreased foot traffic, social distancing, and quarantining neighbors, you need ideas to spark life into your business.  The benefits of gift cards go beyond just this – they’re a source of revenue, they guarantee future customers, and they provide you with free marketing (especially if you customize the gift card with your logo and contact information).

Best of all? It doesn’t take long to set up a gift card system. All you need to do is to:

1. Communicate the idea with local customers to determine if it’s viable
2. Consider the different tools available to set up gift cards
3. Come up with creative ways to offer gift cards
4. Market your new offering to your community

Ready to get started? Hold on, let’s make sure gifts cards are, in fact, right for your business…

 

Step 1: Communicate the Idea With Local Customers

Say you run a local brewery that specializes in IPA beers. Locals drift in to catch up with friends, grab a quick beer after work, and enjoy hand-crafted IPAs on weekends. In order to change things up, you decide to offer free knitting and sewing classes on a weekday. While you may be a needle-enthusiast and love the art and craft of the knitted sweater, your local customer base might not respond well to it.

If instead, you communicated this idea with loyal patrons, they might guide you to a different solution – why not offer hand-knit sweaters with your logo on it as merchandise? 

The point here is that customer feedback is the most important step in the ideation process – and in this case you want to test out the idea of gift cards.

If you receive positive feedback, then get started right away on “Step 2.” If you get mixed responses, you might want to get creative about how you offer your gift card – this will be discussed further in “Step 3.”

 

Step 2: Consider the Different Tools Available for Gift Cards

The next decision to make along this process is whether you want to set up physical gift cards or virtual e-gift cards. There are pros and cons to each. Physical gift cards are more promotional – they sit in wallets and on countertops, reminding customers of your shop. E-gift cards, on the other hand, are easier to keep track of for customers, and they’re easier to create for you. 

Let’s discuss options for both.

The Physical Gift Card

If you enjoy the idea of having something physical to offer local customers, you might be happy to know you’re not alone. Even Gen-Zers (the most virtual of generations) still buy physical gift cards more than e-gift cards by a large margin. 

The most common ways to set up these physical cards are:

  • Gift cards through your bank – Many banks that specialize in small business services will have a program that allows you to acquire prepaid or customizable gift cards. Be sure to talk to your representative about options you have, as this might be a free service (up to a limit). 
  • Gift card vendors – Specialty shops can create custom gift cards for your business. While this might be the more expensive option, they usually offer greater customizability and no limits on the number of cards.

The Virtual e-Gift Card

Virtual gift cards offer the same revenue-driven benefits of physical cards, without the labor of getting each one set up. Common website builders with both e-commerce and third-party sales platforms built-in will often have this feature available.

  • Squarespace, Square, and Shopify all offer gift cards as part of their service. Be sure to check with your third-party platform as this could ensure a smooth process. 

Note: You might have to pay an additional fee for the option of selling and accepting gift cards. Thankfully, if you’ve asked your local customer base, you already know whether or not this return on investment will be worth it.

 

Step 3: Come up with Creative Ways to Offer Gift Cards

While the concept of a gift card is straightforward, there are so many creative avenues for your business to offer them.

  • Offer them instead of coupons or discounts – By offering a $5 or $10 gift card as a way of discounting an item, you not only show your appreciation to customers, but you also incentivize them to come back and buy more.
  • Gift cards for large purchases – Say you run a boutique clothing shop. You can offer gift cards for large purchases. A $20 gift card for a $100 purchase may seem like a hefty margin to eat. However, imagine the experience for the customer. They might come back and make another $100 purchase or more, just because of how much they appreciate your shop.
  • Create special gift packages for each gift card – If you can create more of an experience around buying and gifting a gift card, people might be more willing to purchase them. This could be as simple as a fancy note that goes with it or something thematically tied to your product or service.
  • Use them as customer rewards – Some shops offer a “buy 9 and get the 10th free” stamp card. Instead of this, you can offer gift cards, starting at $5, for continued patronage.

Step 4: Market Your New Gift Cards

Once you’ve ordered your physical gift cards or set up your e-gift card system – and you’ve come up with some creative ways to offer them – it’s time to let the people know. Like any new initiative, you want the messaging to be universal across all your platforms. That includes:

  • Your Nextdoor Business Page – Let locals in on your new product offering. By using the Local Deal feature, you can announce the new gift card and give them a deal as a thank you for supporting your business. Maybe for every $50 gift card, you customers will receive a bonus $5 gift card. This will increase revenue and generate future foot traffic, all in one announcement. 
  • Your storefront – Place the gift cards by the register and put a little flag next to it. This will draw eyes and give you a chance to tell them about the new gift cards.
  • Your website – If you have a website, be sure to put this front and center on the home page with a link or button to where they can purchase it (if possible).
  • Social media pages – Announce this across your social media pages with a photo of the new slick gift cards, even if they’re digital. 

Benefits of Setting Up Gift Cards

As mentioned above, gift cards offer great marketing potential and can drive future revenue and long-term customers. To show you how, let’s dive into the benefits of gift cards:

  • Increases branding effort – Branding has taken on a new form in the current era. Everything from your social media posts, your logo, to your customer rewards system all float in this nebulous term “your brand.” With gift cards, you can tack on your logo, write a little note, and push your brand further out into the world.
  • Encourages repeat and new customers – By purchasing a gift card, the customer will either come back later or gift it to another customer (a friend or loved one), who will then stop by. That’s the power of gift cards – it encourages repeat and new customers.
  • Word-of-mouth marketing – If a customer loves your store and recommends it to their friends or family, this is known as word-of-mouth marketing. It’s the most powerful form of advertising a business can ask for because you can only generate it through high-quality service. Gift cards, then, are a “physical” extension of word-of-mouth marketing because it means people want others to experience the store for themselves.

Give Your Business The Gift of Gift Cards

Gift cards can become the gift that keeps giving. Not only can they make perfect gifts for people to offer friends, coworkers, and loved ones, but they’re gifts to the business as well – driving new and repeat customers to your storefront.

To get in on this marketing and revenue-driving product, determine what options are available to you (either physically or virtually). From there, consider what creative solutions you can implement, and then voice these new products to your community.

 


If you are a local business, claim your free Business Page to get started on Nextdoor. Resources on how to use Nextdoor to stay connected with your local customers during coronavirus, pertinent news affecting businesses, and more, are available in our Small Business Guide for Coronavirus Relief.


Claim your free Business Page to get started on Nextdoor. For resources on how to use Nextdoor to stay connected with your local customers, pertinent news affecting business, and more, follow us at @nextdoorbusiness on Facebook

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