Competition Marketing Retail

Why should a small business sell gift cards?

photo credit: JasperYue

In 2007, $60 billion in gift cards were purchased, amounting to 12% of gift sales during the holidays, according the retail industry sources that track this sort of thing.

$26.3 billion worth of gift cards were sold in November and December 2007 alone.

How many did you sell?

Some Wal-Mart stores have express checkout just for gift cards.

The big reason not to offer them, despite what everyone else says:

  • Breakage, which is a fancy word for “people wont use them”. This is the ridiculous reason that many analysts tout as the best reason to sell them. Obviously, they don’t own a business.

How would you like to sell something one time and never sell something to that customer again? Does that make ANY sense?

Breakage is the LAST thing you want from a gift card customer. You want them to come back and empty that card because… you want them to come back.

The gift card is really a gift for you from whoever buys it. They’re telling their friend or family member, “Hey, shop at this store, I trust them.” and then send them to you, pre-sold on your business’ ability to make them happy.

Once they visit with that gift card the first time, find a way to get their contact info into your store systems. Why?

Because you want to be the ONLY one who reminds them that they still have a few bucks on their card. In fact, that alone is a good reason to ask them for that info.

Who wouldn’t want to be reminded that they have a gift card with money on it? Even better, if they lose the card, wouldn’t you want to be able to deactivate the old card and move the remaining value to a new one?

Communities can put these things in place so that a card is good all over town, but you can just as easily get them that work only on your point of sale systems. Consumers love em. One size fits all:)

RELATED: What to know before selling gift cards in your business

11 replies on “Why should a small business sell gift cards?”

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I have a small business and would like to sell gift cards can you give me a website or number to contact so I can get started….



Just about every manufacturer of plastic cards (they’re all over the net) has the ability to put a mag stripe on them – so be sure to do that.

Also, be sure they encode the gift card account number on the mag stripe AND print or emboss them on the card so they can be used even if the stripe is damaged.

Check with your point of sale software vendor before you order, they may have a particular vendor that produces cards that work with their system. You shouldnt have to pay a fee when a customer uses the card unless you own a big chain with lots of stores and you want the cards to work in all of them. Even then, there are ways around that, depending on your software setup.

Finally, if you are given a choice for numbers, make them like CC numbers but be sure to start them with 1,2,7,8 or 9 so they dont conflict with real credit card numbers.


Hi Stacey,
I was reading through Mark’s Blog and saw your request! The Gift Card Cafe provides a great solution for small businesses who don’t want to invest $$$ in developing their own shopping cart application. We have a Free and quick setup process (within 24 hours) and follow a Fee per/transaction payment model, so if your don’t sell any Gift Certificates, you don’t pay a dime!

Let us know if we can help!

800-410-8103 ext 1

People always have diverse opinion over everything. Most of them at totally differeny poles. Just like gift cards, to some its vague and to others, useful. Having to bear this in mind, I think, that for as long as its useful, then everything is good to go. I think for those who market gift cards, they explain it better and are experts in answering anything relevant.

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