Gift cards are everywhere nowadays. They are not just for big box stores and large national franchises. Many small retailers are offering gift cards to their customers. You may be wondering if your business should as well. Do gift cards represent a smart business strategy or are they a fad that will fade when people realize that they are ineffective?

There are many real benefits to offering store gift cards to your customers. With careful planning, offering gift cards can lead more sales and more customers as well as increased awareness of your store. ?Here?s why:

• Gift card use results in more sales.?Studies show that when customers use gift cards, they often spend more than the value of the gift card. They buy things that are more expensive than what they would have normally purchased. Customers may also make a purchase that they had not planned on making. So gift cards result in higher customer spending.
• Gift cards can bring new customers.?If someone who has never shopped at your store receives a gift card, then she might stop by to check out your store just to use it. If she likes what she sees, she may return as a regular customer. Your gift card has just created a new customer for you.
• Offering gift cards increases awareness of your business.?When your customers give store gift cards to other people, they are advertising your business for you.? Now each time those people looks in their wallets, they are reminded of your store. Gifts cards are marketing tools.
• Gift cards are great for store credit.?When someone returns an item to your store, give them a gift card instead of cash. This ensures that the money will return to your store.
• It is easy and inexpensive to set up a gift card system.?If you already accept debit and credit cards, then it will be easy and inexpensive to add gift cards to your credit processing system. If you do not accept credit and debit cards, then you will have to think more seriously about whether or not you should set up a credit processing system for your small business.
• Your customers want gift cards.?The bottom line is that people are buying gift cards. They offer your customers a convenient way to give gifts to their friends without the worry or hassle of finding just the right gift. By offering gift cards, you giving your customers what they want.

Here are some issues that you may need to think through before offering gift cards:

• Setting up a gift card system takes time.?Make sure you start setting up your system long before you want to see the gift cards in your store. You cannot set up for gift cards a week before Black Friday.
• Display your gift cards prominently.? It is easy to get caught up in the technical details of setting up for gift card use. Don?t forget to think about how you are going to display these cards in an attractive way for your customers.
• Prepare for potential cash flow problems.?If you sell 100 $50 gift cards, you are eventually going to have to give away $5000 of inventory from your store. You want to set money aside so that you will be prepared when these gift cards are redeemed.
• Some customers are upset by gift card policies.?For example, a customer may not like it if a small amount of money if left on a gift card. Research potential complaints and make a plan to keep your customers happy.

Overall, gift cards can be an effective strategy for growing your business. They increase sales, create new customers and are an effect marketing tool. With careful planning, you can use gift cards to create these results for your own business.