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There is a new promotional idea that is being adopted by many retailers with a great deal of success.  Here is how it works. It starts after the customer purchases something. For example, let’s  say the total of the sale is $100 which is made up from 2 items, but the amount of items is not relevant.  You, the store, gives that customer a coupon for 15% or 20% of the purchase they just made. The coupon must be used within 6 days.

So the customer who spent $100 gets a $20 Gift Card. But the card can’t be used the day of the original purchase. Some stores don’t even allow the gift card to be used for the day following the purchase which means that the customer who earns a $20 gift card on Saturday can’t spend it until either Monday or Sunday if you choose to go that way.  But the card must be redeemed   by Saturday.  Very few people want to throw away $20 worth of FREE merchandise so they find a way to get into the store.

What it means is that our customer has a compelling reason to get back to the store and they do. The return rate on these cards is over 70% according to recent studies. That is a bunch of customers who wouldn’t have come back at all.
There is another advantage here that you might be missing. Many of you are saying that this is no big deal because all you are doing is giving away 20% and you know that people will only spend the $20 they have and leave the store.

NOT SO! First of all, you are not considering that if the customer returned and only spent the $20 card you would be giving a 16.6% discount over all. Understand the % off is spread between 2 purchases not one. However, that is really a moot point because although the customer comes back only to spend the gift card, 93% of the customers who come back to the store will exceed the $20 or whatever the amount of the card is.

Let’s address two other factors. I said you can give 15% or 20%.  Which is better?  Whatever the amount that is enough to bring the customer back to the stores. That’s why some stores will have a sliding scale. 20% under $100 and 15% if it’s over $100. In other words, if the customer spent $300 and got a $45 gift card that would be sufficient to bring them back. The goal is to bring them back so they are giving you the opportunity to sell them again.

This is such a powerful tool because it helps increase shopping traffic that has been missing for some retailers. Some stores only use it for certain items and that’s fine too. But either way, it’s a winner!