Use this tool to calculate the impact Gift Cards can have on your business. It’s very simple:
Enter the average amount you normally issue gift certificates for or what you project to be the average gift card sale to be. Most gift card sales will be in the $50 range
Enter the number of cards you plan to sell the first year
On average, consumers will spend 20% more than the face value of the gift card they receive. Use this number or enter a number you feel more comfortable with
Enter your cost of goods % to calculate the gross profit you will realize
On average, you will see that 12% of your gift card sales will never be redeemed. This is pure profit for your business and known as “Breakage”. Use this number or enter a number you feel more comfortable with.
Gift Cards have been the fastest growing merchant product of all time. Gift Card usage has surpassed paper gift certificates to the tune of $63 Billion vs. $12 billion. What makes gift cards so popular? Here are a few reasons:
Gift Cards reduce administrative and reconciliation costs vs. manual administration with paper gift certificates
Reduces the possibility of fraud and theft by employees
Enhances cash flow by collecting payment prior to delivery of service
Reporting offers monitoring and security controls
Rechargeable cards encourage repeat business
No Change Given. Gift Cards are 100% value and can be used in place of refunds driving additional repeat business
Ideal marketing tool for a wide variety of promotional opportunities
83% of Americans use Gift Cards
61% of Gift Card holders spend MORE than the face value of the card
First Year Program Revenues
Average Card Value:
$
Number of Cards:
Total Card Value:
$
+
Customer Spends more than %
value of card: $10 x 100 = $