Eighty-eight cents may have more value than you think. According to the 2019 Small Business Gift Card Study, released today by Fiserv, small business owners can expect consumers holding a gift card worth less than a dollar to visit their store to redeem it. As small businesses jockey to increase foot traffic and engage customers in an increasingly competitive market, the study explores how consumers are using gift cards at small businesses, and highlights the benefits gift cards can deliver.
Conducted in the spring of 2019 and originally commissioned by First Data, now Fiserv, the study gathered insights from adults ages 18 to 76 across two distinct groups: 1,084 consumers, and 628 individuals who own or manage a small business in the U.S.
“Small business owners have a tremendous opportunity to boost revenue, foster customer loyalty, and strengthen their brand by investing in gift card programs,” said Dom Morea, senior vice president, Prepaid Solutions, Fiserv. “Gift cards are not only a potential growth engine for small business owners, they have become increasingly popular among consumers.”
Small Businesses, Big Benefits
Gift cards aren’t just for big businesses. In fact, 74% of consumers surveyed said they regularly buy gift cards from small businesses, underscoring that gift cards have utility at coffee shops and corner stores and that customers expect them to be available for purchase and redemption. The benefits of gift cards can be significant, helping small businesses attract new customers and build relationships with repeat shoppers. According to the study:
- 90% of consumers who receive a gift card from a small business they have never visited said they would shop at that business and return there in the future
- 56% of surveyed consumers join loyalty or frequent shopper programs at small businesses. The same group said gift cards are the preferred way for their loyalty to be rewarded
- Nearly four out of five consumers surveyed said if they have a gift card valued at 88 cents, they’ll visit the store to redeem it.
Whether Giving or Receiving, Dining Wins
Consumer opinions can vary widely, but when it came to determining which business types they’d most want to give or receive a gift card from, they tended to agree. The most desired business types for small business gift cards were, in order of popularity:
- Casual dining restaurants
- Coffee shops
- Specialty services (such as nail salons and barber shops)
Digital vs. Physical
While digital gift cards continue to grow in popularity, physical gift cards are still preferred amongst consumers. Of those surveyed, 60% said they prefer physical gift cards or paper certificates to digital versions.
Among the 40% of consumers who said they prefer a digital gift card, the main reason was because they are quick and easy to send and receive. Other benefits of digital cards are their availability on smart devices, and the ability to easily check the card balance.
Viewpoints from Small Businesses
Small business owners surveyed were clear that simplicity and efficiency of implementation and operations were critical elements to a successful gift card program:
- The ability to integrate with a point-of-sale platform, such as Clover®, a cloud-based point-of-sale solution from Fiserv, was the top benefit to small businesses
- One-third of businesses without a gift card option would add one if they thought it was easy to implement.
Fiserv, Inc. (NASDAQ: FISV) aspires to move money and information in a way that moves the world. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and the Clover cloud-based point-of-sale solution. Fiserv is a member of the S&P 500® Index and the FORTUNE®500 and is among the FORTUNE Magazine World’s Most Admired Companies®. Visit fiserv.com and follow on social media for more information and the latest company news.