According to research, a typical person who has a gift card will buy nearly 38% higher than the value on the gift card. It is pretty hard to get the exact amount on the gift card, so most people spend more. Plus, since items can be specified, these people tend to buy things with good margins.
Even better for the retailer on a gift card sale is that users are rarely existing customers; they are new customers.
Thus, what many retailers do is offer some discounts for their gift cards to get more sales.
I have a better idea. Instead of selling $100 at a 2.5% discount, sell two gift cards. One for the proposed beneficiary at $100 and the other for the gift card buyer for $2.50 as a thank you.
Here, you might get two customers, the beneficiary of the gift card and the buyer.
You will find here that only are gift cards a great tool for spreading the word about your business. They also bring two customers through the door with increased basket size with two separate sales transactions.
