Retailers across various industries have long seen the benefit of offering gift cards customers can use to make purchases.
Whether conventional physical cards or digital ones, gift cards provide another sales option while increasing brand awareness and offering the possibility of using them in conjunction with customer retention and loyalty programs.
Such benefits could be even more pronounced for marijuana retailers unable to access traditional banking services due to federal prohibition.
Here are five reasons why cannabis dispensaries should consider offering gift cards.
1. Gift cards encourage sales
Whether in-store or online, customers tend to be more conscious of their spending when paying with cash and debit or credit cards, even more so with spiraling inflation.
Gift cards given by a friend or family member, however, carry no such worries. They didn’t cost the customer anything, and it is in their interest to spend the full value of the gift card.
2. Customers tend to spend more than the gift card is worth
Indeed, customers are likely to be encouraged to buy more than the gift card is worth as it helps reduce the cost of higher-value products that might otherwise be out of their budget or that they would be generally unwilling to pay for. Additionally, these high-cost items are generally the hardest ones for retailers to sell.
Customers may even ask friends and family for gift cards that they will save up over time so they can buy exactly what they want, even if it is very expensive.
3. Gift cards are good for cash flow
With a gift card, the customer is paying upfront. Whether the recipient of the gift card decides to redeem its value or not, you are guaranteed payment.
This also has the benefit of spreading purchases out from busy periods, such as Christmas, when sales are higher. Instead, a customer receiving a gift card may choose to use it several months later when sales are slower.
4. Gift cards make promotional offers even more effective
With gift cards, retailers have the option of assigning it more value than the customer paid for it. So, a $40 gift card could be used for $50 worth of purchases.
This small discount gives the customer greater incentive to purchase a gift card, since it appears even more generous to the eventual recipient.
5. Gift cards increase brand awareness
Especially in physical form, gift cards are another way to get your company’s branding out there. Eye-catching designs and intriguing text can encourage new customers to check out your store beyond the original recipient.
In short, gift cards are a simple and effective way to help stimulate more sales, while also building stronger relationships with existing customers and helping to encourage new ones to try out what you have to offer.