Does your company accept and sell gift cards? If not, you could be passing on a chance to boost sales, enhance client loyalty, and build your brand. Gift cards provide you with the money in advance before the buyer even begins to purchase, acting as a kind of advance payment to your business. You can get a physical or digital gift card.

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How are gift cards operated?

The gift card is purchased by the client, either in-person or online. When a gift card is purchased in person, the cashier activates the card with the designated amount after choosing the gift card program from the POS system. The gift card and a printed receipt with the gift card balance are given to the consumer once they have made their payment. The receiver receives the gift card from the customer after that.

When making an online purchase, the buyer enters the desired quantity or chooses from a drop-down menu of options. The consumer completes the payment by entering the recipient’s name and email address, writing a note to them, and completing the transaction. The letter, gift card value, redemption instructions, and a special number or barcode are automatically sent to the recipient via email via the system.

The methods used by companies to redeem gift cards

Consumers can use a real gift card, a copy of a digital gift card, or even a QR code on their smartphone to redeem gift cards. Accepting payment for a gift card is as simple for the cashier as choosing it from the POS system interface. The gift card number will then be manually entered by the cashier, scanned if it has a barcode, or swiped if it has a magnetic stripe.

If the gift card has a balance, the merchant account payment processor will authorize the transaction and take the amount of the purchase off the balance. The POS will notify the cashier that an additional payment method is needed to cover the overage if the purchase costs more than the amount on the card.

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After the transaction, if the gift card has any leftover balance, the cashier will return the card to the customer and a receipt will print out with the remaining amount. The cashier can recycle or discard the card if there is no residual balance.

Online gift card redemption

Customers must choose “gift card” as the payment option at checkout in order to redeem an online digital gift card. Customers with existing accounts, on the other hand, can log in and update the profile with the gift card balance. Purchases will deduct from the gift card balance until it is used up, or the consumer may opt to utilize the gift card balance at checkout, depending on how your website is configured.

Six advantages of gift card sales

Selling gift cards has several advantages, including raising brand recognition and enhancing cash flow. Gift cards can benefit your business in the following six ways:

1. Increasing recognition of the brand

Gift cards serve as an ongoing advertisement for your business every time recipients open their wallets since they are imprinted with your company’s name, logo, and message. Because they provide a strong incentive to visit your store or website, gift cards are among the most economical forms of promotion you can utilize. The recipient of the gift card also serves as a spokesperson for your brand. The fact that they bought the card is a good recommendation to the receiver.

2. Increasing cash flow

When a consumer purchases a gift card, you get paid right away and are not need to wait for a holiday or the recipient’s birthday to get paid. Your company will incur less costs overall if the gift card is not used by the recipient or is used only partially.

3. Targeting a younger audience of customers

InComm’s Consumer Pulse report indicates that 37% of gift card purchasers are millennials, who also purchase the greatest number of gift cards. The remaining 28% are Gen Xers. Additionally, you’re in luck if your target market consists of married women without kids—half of gift card purchasers fit this profile.

4. Growing your clientele

Giving a gift card to someone makes it more likely that they will visit your store, even if they have never heard of your company before. provided you sell digital gift cards, you may send the receiver promotions and advertisements provided you get their email address.

5. Entering the market for business gifts

Gift cards are excellent choices for presents from company owners to top clients or staff members. The cards are highly valued in perception, but the recipient gets to choose which one to give. A research conducted by Murphy Research and Blackhawk Network found that 69% of workers said they would consider gift cards from their employers to be a reward.

6. Increasing revenue over the holidays

Offering gift cards is a great way to increase Christmas sales, even if the products you sell are difficult to wrap and place beneath the tree. Businesses that provide services, including restaurants, car washes, gyms, and salons, benefit greatly from gift cards.