Gift Certificates
The effective use of gift certificates.
Improve profits and reduce costs by making one simple
change to how your gifts business handles gift certificates.
Almost every business handles gift certificates the wrong
way. This article explains how to handle them and why.
Putting Expiration Dates on Gift Certificates Cuts Profits
If you put an expiration date on gift certificates
purchased from your business you are throwing money away.
If you do and the date is less than 6 months away, you are
adding to the cost of your fulfilling that obligation and
here's why.
A gift certificate that is purchased today can buy 100% of
the goods and services that your business offers today. So
if a gift certificate is redeemed soon after it was
purchased, your cost to fulfil that obligation is the same
as it would be if the person just paid with cash.
But, if that gift certificate is not redeemed for 6 months,
12 months or longer, the value of goods that can be had for
the original purchase amount is less.
GIFT CERTIFICATES
For example, (£15) $20 today will most likely buy more than (£15) $20
will three years from now, because of inflation, and other
factors.
So the longer the time between the original purchase and
when the certificate is redeemed, the more profit you will
make.
Now before you say that you have no control over when a
gift certificate is redeemed, let me address a proven fact
when it comes to deadlines or expiration dates. The further
out the date, the lower the sense of urgency to take action
before the date.
This is not my speculation or postulation, but has been
proven on all types of things, but specifically on money
back guarantees for all types of products.
The best direct response marketing companies know that
fewer people will ask for a refund if the expiration date
for honoring the refund or guarantee is a long way off.
The customer considers that he has a whole year to change
his mind and is in no rush to make a decision. Then they
get busy and the warranty has expired. They have integrated
the product they bought into their life.
Take some pressure off your customers and increase your
profits by extending or removing expiration dates from
your gift certificates and guarantees. You'll see less
returns and higher profitability.
Duncan Alexander wrote this article & is president of
Fog <a href="http://www.fogmarketing.com">Marketing</a>
which is one of the best sites to get targeted, double
screened PPC traffic. For more details, go to:
http://www.fogmarketing.com
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