Have you ever wanted to get someone a gift but spent the entire day running through a list of suggestions and not arriving at what to give? Then you think of a cash gift, but the cash seems so little, or you are not sure how they will react to getting a cash gift. Pretty much everyone has had these struggles - the perfect gift dilemma.
And why do you think we have this dilemma? It’s because we want our gift to be helpful, to mean something to the people we are giving. Now, that's where a gift comes in.
Lately, the popularity of Gifts cards has been on the rise in Nigeria. This is partly because of the evolution of e-commerce and the ease of buying and selling internationally. Exposure to international brands and stores that have gift cards as a norm had Nigerians digging into the use of Gift cards. Even better is the new trend of trading gift cards for money when you do not wish to purchase with them.
What is a Gift Card
It is a type of prepaid debit card funded with a specific amount of money and can be used to make purchases as an equivalence of cash. A Gift card is also called a Gift certificate or a Gift voucher.
Gifts cards used to make purchases in just a particular store or a particular brand are called Closed-loop. And cards accepted by many stores or brands are called Open-loop cards. However, even with an Open-loop card, the card has to be used at a participating store or brand.
Another classification of Gift cards is Physical cards and Digital cards. The description of these cards is as the name suggests. The physical card is a plastic card, and the digital card is a unique gift code number used to make purchases online. It should not be confused with a Coupon code which is merely a promo code for claiming discounts on select products. Both the Physical and digital cards serve the same use.
What does this mean for your business?
Gifts cards have turned out to be an effective marketing tool. Major brands like Amazon, iTunes, eBay, Walmart all have their branded gift cards. Gift cards drive customer acquisition and encourage customer loyalty among existing customers. Some branded Gift cards, although being Open-loop, are eventually used at that store. It also contributes to brand awareness. A person who has never heard of your brand could be gifted a gift card of your brand.
Gift cards are also an effective revenue management tool as it increases cash in-flow. When a gift card is purchased, money flows in for you. Although its product value has not been redeemed, on paper, a sale has been made. Revenue has been generated. You have money at hand that can be invested and used to expand your business.
The most popular Gift cards in Nigeria remain those of international brands and companies like Amazon, iTunes, and eBay. And about 90% of these cards are exchanged for cash instead of using them to make purchases, hence the growing market of Gift card exchange in Nigeria. Gift card exchange for money is also an accepted practice in other parts of the world. A good number of major brands in Nigeria have taken advantage of this growing awareness to launch their gift cards. You should also take advantage of this trend for your business to drive up your sales. Even if the initial sales turnout is low, there is nothing to lose.