Gift Cards: your tool to fight the retail financial crisis

We have been hearing many news about how COVID-19 has changed the financial background in Europe, the unluckiest ones have even experienced it on their skin. In the business framework surely the most affected sectors have been travel, hospitality, restaurants and traditional retails.

The companies that have financially survived are now trying to find new sources of income, often by either diversifying their sales offer with news products, services or by testing new marketing strategies.

The first choice is rather an expensive path that comes with the desperate need of quickly acquiring new competences to integrate and manage a new business unit. On the other hand, the second option is surely safer, cheaper, and often more effective.

In the giant pool of marketing, between waves of creativity and slaps of reality, there is a reliable sales and marketing tool: Gift Cards.

Gift Cards have been discovered more and more in the last years, not only by private users but also by companies. In fact, gift cards are an easy-to-use branded payment method, that can be carried either in the pocket or on the phone, ensuring nevertheless great KPIs.

You might ask yourself: “Ok, should I build up a Gift Card program for my company, either investing my internal IT resources or by purchasing a ready software by one of the leading companies on the market?”

Surely, Gift Cards do bring you new natural sales when being sold in store and on the e-commerce to private users. However, to really exploit the marketing potential of gift cards you should invest in self-promotion!

Let me give you more details.

When you decide to integrate Gift Cards promotions into your customer journey to achieve specific marketing objectives, the results are guaranteed.

Let’s say you want to make your customers more loyal and ensure that they come back in the short term. Offering a discounted Gift Card with a limited validity, not only will provide you with straight-away cash, without having the costs yet of the sold product/service, but it will also ensure that the customers owning Gift Cards will come back to your store before their gift cards’ expiration date.

Another opportunity to get similar actions is implementing new customer acquisition targets, by activating a member-get-member campaign or a welcome gift, when reaching a certain basket value.

Moreover, great results can be reached with reactivation campaigns.

Did you know that Gift Cards have a +25% of reactivation rate, compared to the traditional discount vouchers? Thanks to Gift Cards a classical reactivation DEM to your client’s database can be a great success.

And this is just a bite of the huge possibilities of Gift Cards as marketing and sales tool!

Article by Francesca Raimo, International Merchant Service Director at Amilon

Gift cards for employees: cost for the company or investment in its competitiveness on the market?

The quick answer is: both. Technically and in terms of accounting, gift cards are a cost to an enterprise, while from a modern and wise human resources perspective, gift cards are an investment in the future of our company.

Gift cards are one of many direct instruments of modern incentive policy for companies, taking care of employee well-being, employee motivation and attitude to the workplace, while indirectly affecting the competitiveness of companies on the labor market and their image as an employer.

This criterion has become equally important with others, because of the so-called employee market development – once employment was associated with employee submission to the company and unequal relations, while nowadays in healthy and mature organizations there should be a balance in mutual relationship: the company employs an employee because it values his competences, skills and personality, while the employee decides to choose a given company because, apart from competitive remuneration, it also values the employer’s reputation, work environment, atmosphere and people. An important element complementing the whole are non-wage benefits offered to employees, such as gift cards for well-known brands.

Gift cards are usually bought by enterprises as comprehensive packages, so-called cafeteria systems – remuneration systems that allow employees to choose from a range of benefits offered within a certain financial limit. An example of a cafeteria offer: tickets to the gym, swimming pool, fitness, prepaid cards, tickets for sporting and cultural events or just gift cards and vouchers for stores of known chains and brands.

In order to motivate companies to use this solution and its popularization and to facilitate financial settlements, the fiscal system of many countries, including Poland, has provided tax and social security (ZUS) incentives related to the use of this solution. Specific categories and type of gift cards aimed at employee development can be even exempted from taxation. In Poland, this limit amounts to PLN 1000 per employee per year and is regulated by the company social benefits system (ZFŚŚ).

There are many employee benefit agencies on the market (B2B channel) which, apart from an attractive substantive offer (interesting brands in portfolio) also offer comprehensive support in the settlement of gift card costs – they know which cards fall within the scope of benefits covered by the social benefits fund, how to qualify them as costs and bill them.

Amilon also offers a wide range of gift cards in its portfolio – around 200 partner brands around the world – which are used to reward and motivate employees. Gift cards are available in various denominations and conditions of use. We help in choosing them for your company and employees. We remain at your disposal for the contact and consultancy.

Article written by Karol Ziółkowski, Business Development Manager Poland @ Amilon Warsaw