Gift Cards

The Power of Electronic Gift Cards

Gift Card Programs : Launchbox, Jumpstart, and Choice Gift Card Programs : Launchbox, Jumpstart, and Choice Gift Card Programs : Launchbox, Jumpstart, and Choice Gift Card Programs : Launchbox, Jumpstart, and Choice
  • Gift Cards outsell paper gift certificates by 200% to 1,000% -that's money in the bank before you have delivered any goods or services
  • Wallet placement builds brand awareness and customer loyalty
  • Declining balance keeps cash in the store
  • Customers spend more & are less price sensitive: - 61% spend more than the value of the card
  • Merchant becomes destination vs. impulse - 72% of the purchases of Gift Cards were planned (not impulse buys) - 50% of Recipients needed more than one trip to the store to use the value on the card
  • Minimizes losses - can't be easily duplicated
  • Powerful promotional tool for a wide variety of advertising/marketing campaigns
  • Web-enabled transaction reporting and financial management from one to hundreds of locations
  • Potential income from breakage: $ that has been prepaid but never redeemed 12% of all value loaded on Gift Cards is never redeemed
  • Small merchants can compete with national chains and their marketing programs -information and statistics provided by Valutec Card Solutions
Merchant Return on Investment

Why the Optimism

"The Starbucks card is the most significant new product since Frappuccino" - Howard Schultz, Starbucks Chairman, Business Week, March 2002
Starbucks sold 2.3 Million cards in 45 days for $32 million in pre-loaded value. - Seattle Times January 2002

Retailers Perspective**

Lowe's Building Centers

On a Christmas Eve, Lowe's sold 580,000 gift cards in 9 hours for a total value of $21 million. The $100 cards produced an average sale of $152, creating a 52% ticket lift.

Dimple Records

A music store with four locations located in Central California launched their gift card program in October 1999 with an initial card order of 2500. As of January 2003, they have ordered a total of 87,000 cards and have processed over 207,000 transaction.

Starbuck's

Has issued 18,000,000 gift cards since 2001!

Interesting statistic: $17.24 billion was spent on pre-loaded plastic cards during the 2003 holiday season.

**Green Sheet 1/12/2004 Issue 04:01:01