Gift Cards

The Purpose of Gift Cards

The purpose of a gift card is to generate or encourage NEW business. It is NOT intended as an automatic discount for anyone and everyone. It is not to be used to close a sale. It is also not a substitute for negotiating the price of an item. If the customer wants to pay a lower price, then negotiate a lower price – do not throw in a gift card.

Gift cards are sent out to encourage customers to come in and buy from us who are not already planning to come in and buy from us, or are not already shopping with us. Once the customer is shopping with us, giving out gift cards is no longer an option, even if the customer seems as though he or she might not buy the item that is being considered. That’s where closing and negotiating techniques are used, not gift cards.

Gift cards are mailed out, never handed out in the store or sent in an email.

Gift Cards Cannot be Combined

Customers can only use one gift card per transaction, per day, and per sale. You can’t ring up two items on two invoices and use a gift card on each one. You can’t ring up one item to the wife and one to the husband and use a gift card on each one. You cannot split a sale over more than one day as a way to bypass this policy. The intention behind a gift card is to help create NEW business, NOT discount current business.

The only exceptions are for VIP cards and VIP Referral Rewards cards. They are treated as cash so they can be combined with ONE other gift card only.

Always Note in Contacts Log when Sending out Gift Cards

Whenever you send out a gift card, you must note it in the contacts log. If a gift card is used on a sale, and there is no earlier dated note in the contacts log of when the gift card was sent out, then the commission on the sale may be forfeited.

What to Write in the Gift Cards When Mailing Out

Sending out gift cards such as the ones printed on a “Thank You” sized card do NOT count as a letter for a salesperson unless the salesperson personally writes a personal note to the customer inside the card.

You should write something that elicits a response or suggest an item to purchase. Try to create some demand for a product with what you write. The idea is to create a sale in the very near future, if not immediately.

The Types of Gift Cards

We have several types of gift cards offering $100 off of purchases of $500 or more, or $50 off purchases of $250 or more, plus different amounts for the VIP and VIP Referral Rewards cards, and we may have more in the future, so this applies to them all in general and applies to new ones as they are created.

All gift cards will ALWAYS have an expiration date on them (with the exception of VIP cards, which may or may not).

Birthday Gift Cards

After surveying you all, it seems that 20-30% of birthday gifts are self-purchase, but I have a feeling that it is less than that. But even if you are correct, 70-80% of the time the spouse is the buyer, and we are NOT sending the gift card to the spouse, thus cutting our own throats. Don’t know their spouse’s name? Then get it and get the spouse’s birth date as well!

Birthday gift cards should be sent to the spouse! Get the spouse’s name and send it to them!

Put an expiration date of 2 weeks after the birthdate on a birthday gift card. No more than that. The card was designed to get them to buy for THAT event.

Anniversary Gift Cards

I assume that it is still the same as when I was selling and that the man usually buys the anniversary gift. If this is the case then you should send the anniversary card to the man, and NOT addressed to the husband and the wife. If she opens it, and she isn’t buying anything for him, she may just trash it. If you know that both of them might buy something then send them EACH a card separately.

But primarily send an anniversary gift card to the man.

Please don’t be an unthinking robot when you promote to your customers. THINK about what would get us the best result and promote in the direction of the best result.

Ideally, they are to be sent 2 weeks before the event, but in any case no more than 30 days before nor later than one week before.

Put an expiration date of 2 weeks after the anniversary on an Anniversary card. No more than that. The card was designed to get them to buy for THAT event.

Welcome Gift Cards

These are NEVER to be used to give a discount to someone who is here to buy anyway. They are to be used to encourage new business. Not to give an automatic $100 off to someone who is already going to buy.

Welcome cards are to be mailed to every NEW customer who comes in to shop and does not buy. Be sure the gift card is sent out that same day, because they are actively shopping and we want to encourage them to come back and buy from us.

Put an expiration date of only 3 months away on a Welcome card.

If you are sending catalogues to doctors, real estate people, professionals or other big shots and you are purely prospecting (prospecting means you contact them first instead of them contacting us first) then date the gift card for 12 months away. In no other case should the card have such a faraway expiration date.

We Missed You Gift Cards

These can be sent to customers who have not been in or made a purchase for 6 months or more to encourage them to come in. These are NEVER to be used to give a discount to someone who is here to buy anyway or who is asking about something they might buy. They are to be used to encourage new business from existing customers. Not to give an automatic $100 off to someone who is already going to buy.

Put an expiration date of only 3 months away on a We Missed You card.

Come Back Soon Gift Cards

These can be sent to customers who have just been in and bought something or gotten a repair done, to encourage them to come in again soon and buy again. Do not send it if the customer is already planning to buy something else. These are NEVER to be used to give a discount to someone who is here to buy anyway or who is asking about something they might buy. They are to be used to encourage new business from existing customers. Not to give an automatic $50 off to someone who is already going to buy.

Put an expiration date of only 3 months away on a Come Back Soon card.

VIP Gift Cards

We’ve been sending these out yearly starting in 2007. We send out VIP Gift Cards to anyone who has purchased in the last year with a total profit of $1,000 or more. These gift cards serve two purposes: to build customer relations by letting our good customers know that we appreciate them and to get our VIP customers to come in and shop with us.

These gift cards are cash value to the customer and there is no minimum purchase required to use them. They originally did not have an expiration date, but we added an expiration date to later issues so be sure to look for one before assuming there is none.

VIP cards can be used as a down payment for a layaway but none of the others. The layaway has to be for a short and finite period of time just like any other and if it’s not picked up when due, the item goes back to stock and the gift card stays on the customer’s account as store credit/AR (see layaway policy).

This is truly a gift from the store to our customers. We are taking the risk that most of the customers are indeed VIPs and will spend more than the amount on the gift card.

Stats for Sales using Gift Cards as Payment

The store is essentially buying this business for the salespeople by offering a discount, and for every gift card that is taken in, the store loses that profit on the sale. To also pay out the full commission on what for the store is a discounted sale doesn’t make financial sense.

Taking a gift card as payment can make that sale go under minimum, except for VIP and VIP Referral Rewards cards. The amount of the gift card is subtracted from the amount of the sale; if the results are under the minimum selling price then the 3% under minimum commission applies. If the sale is still over minimum after subtracting the gift card then the full commission applies. The gift card is not subtracted from either the GI or the GP when statting the sale, only to determine whether the commission will be 3% or 7%.

Never Add in a Gift Card Until the Customer Presents It

When you look up a customer who has come into the store and check notes, you may see that they were sent a gift card that has not been used yet. Do not mention this fact to the customer. Let the customer shop and make their best deal – but – leave room for the gift card in your price. If the customer then whips out the gift card, apply it to the sale as appropriate (remember that many cannot be used with other discounts so if the sale is already discounted, only VIP cards can be used).

If the customer does not whip out the gift card, do not mention it! Invoice the sale, take payment, and send them on their way. Make a reminder in a few weeks to send a letter or email to the customer telling them that you just noticed that they have a gift card they have not used and reminding them to come in and use it. Do not send this letter too soon after the sale or the customer may come in and try to use the gift card on the previous sale! We don’t want that. We want them to use it on the next sale.

Attach the Gift Card to the Invoice

When a customer uses a gift card, always attach the card to the invoice. If you don’t have the card for any reason, then don’t attach anything.

If a Customer Forgets the Card at Home

Look them up in the computer and verify that you did send a card and the amount. Look under “View this Client’s Payments” to verify that this gift card has not previously been used. Then let the customer use the card. Be sure to note in the log that the card has been used so that the customer can’t use it again later!

Summary

• Gift cards are not to be used to offer discounts to customers that are already interested in buying something or are actually here to buy something
• Gift cards are mailed to customers only, they are not handed out in the store or sent in an email.
• Always note in the contacts log when a gift card is sent out.
• ALL GIFT CARDS WILL HAVE AN EXPIRATION DATE ON THEM.
• The expiration date should not be so far in the future that it gets forgotten. It should be dated so as to create a sense of urgency and cause a purchase.
• Gift cards should be sent to the person that is most likely to use them.
• Never volunteer to use a gift card until the customer presents it and asks to use it.
• Gift cards cannot be combined, except for VIP cards and VIP Referral Rewards cards
• Only VIP cards can be used as a deposit for a layaway and only for a short and finite period of time.
• The gift card is only subtracted to determine if the sale is under minimum.