Now is the time for local small businesses to consider offering gift cards

Gift cards have been a great way to increase your business results for years. Small Business Trends contacted Ray Clopton, CEO of We wanted to know what SMEs need to know about this important business tool.

Clopton began with a brief history.

“Gift cards used to be a plastic card with a magnetic stripe like a credit card. They were loaded with monetary value and given as gifts,” he writes. “These were later redeemed in a specific store or restaurant.”

As business owners may already know, all of that has changed with the internet.

Digital cards

“Today, gift cards can also be digital, either sent by email or SMS. This makes it an even more practical gift option. Especially in the midst of a socially distanced holiday season.

He goes on to explain why they are important by saying that credit cards help a business generate revenue right from the start. And small businesses get additional sales when these cards are redeemed.

In the past, companies indicated that the amount of unclaimed money was another advantage. Clopton says even that has changed with the new laws.

“Recent legislation has made it easier for consumers to redeem gift cards for longer periods of time,” he says. “It increases consumer confidence in the product.”

Still not sure about getting involved with gift cards? Consider another real benefit: customers almost always spend more than the original value.

“Plus, people often use gift cards to introduce friends and family to brands they themselves love. So it’s also a great way to win new customers,” writes Clopton.

Three main types

There are three main types to choose from. Plastic can be displayed in physical stores. Electronic gift cards are sold online and often sent by email. Then there are those sold online and sent by SMS.

Versions sold online can be stored digitally, so there is more security than physical cards which can be lost.

Clopton explains how their ROI goes beyond incremental sales.

“Gift cards provide revenue to businesses through different channels: online marketplaces, Facebook pages, corporate websites, etc. They are also perfect for special promotions such as: buy $100 in gift cards, get a bonus $10 e-gift card. “

After Hours

These digital releases are also perfect for last-minute and after-hours shoppers.

There is a checklist when small businesses choose a supplier. Start by listing the benefits you would like to offer your target market.

  • Look for a provider that offers options that you can easily add to your website. There are still plastic-only businesses that need complicated e-commerce setups.
  • A good gift card provider should also offer plug-and-play options that are easily integrated with social media.
  • You should be allowed to sell gift cards in omnichannel environments, both online and in local pharmacies and supermarkets.

Security is another must have.

“The key is to select vendors that protect against fraud and allow you to sell through different channels,” says Clopton. Small businesses should choose their gift card program provider carefully. Many processors do not offer online digital gift card sales or anti-fraud features.

Local sales

It has a cautionary tale for business owners looking to profit from local sales.

“Many consumers these days know that shopping local is best for the community. But when they go to buy gift cards online, they find that the option is not available.

This can drive shoppers to purchase gift cards from large chain stores or restaurants.

Finally, some traditional businesses like cafes, retailers, and restaurants do well with gift cards. However, all companies can get something from them and their promotional power.

“We’ve seen dentists, landscapers and DIY services use gift cards to run successful promotions and win new customers,” says Clopton.


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