How to make gift cards your most powerful marketing tool

Gift cards are a powerful marketing tool you can use to generate buzz for your brand and attract future sales. However, it’s important to consider how different states and jurisdictions regulate the sale of gift cards.  

Know the rules and guidelines for gift cards

Before you consider selling or giving away gift cards make sure you understand your obligations as an operator and the rights of your customers. 

You will need to check both national and state regulations. Different states may have slight variations in their rules with regards to the fees, expiration, and escheatment of the gift card.  

If you’re still unsure about the legalities, you can always seek professional advice. Contact your state’s consumer affairs body if you have any questions.  

Set the terms

You will need to specify your gift card terms and conditions. Most jurisdictions require that terms and conditions are readily available for customers who purchase gift cards. It can be included as part of your general terms and conditions on your website or displayed separately elsewhere. Regardless of where you decide to put it, it should be accessible to the public.  

Know gift card accounting

The sale of a gift card should be recorded as a liability, not an automatic sale. That means if you sell a gift card worth $150, that money shouldn’t be recorded as revenue. Rather, it should be placed in a separate account and should only be transferred to sales once the card is redeemed.  

For this matter, it is best to speak to your accountant. Know the financial obligations tied with selling gift cards before you start offering them.  

Some tour operator software includes a feature that can help you sort out obligations with your gift card sales, from purchased cards to outstanding balance value.  

The Australian Government Treasury has a comprehensive resource which covers gift card administration.

Using gift cards in your loyalty program

Another good benefit of using gift cards is to encourage brand loyalty among your customers. You can give your customers special rewards when they book or purchase your products using your gift cards.

Final Tip 

Once you have your gift card policies in place, you need to constantly monitor the program. This means you need to know the funds you receive from selling the cards and the outstanding gift card balance of unredeemed cards.  

Subsequently, make sure you remind your customers of their unredeemed gift cards. Since you already have the program in place, make sure you promote it to your customers, resellers, and local partners.