Gift Cards are a growing market

  • Gift card sales in 2005 were estimated at approximately $65 billion – up an estimated 24% from the previous year
  • The average consumer spent $233 on gift cards with an average value of $48
  • 92% of adults have gift card awareness - up from 76% in 2002
  • 59% of the American shopping public, 131 million people, has used or reveived a gift card in the past twelve months.

Benefits of using Gift Cards for your Business

  • Plastic gift cards outsell paper gift certificates 10 to 1
  • Card circulation helps build brand awareness
  • Declining balance keeps full cash value in store
  • 56% of customers spend more than card value
  • Powerful promotional tool for marketing campaigns
  • Electronic audit trail minimized losses
  • Merchant billboard in customers wallet

Return On Investment - Profit Potential

(When Purchasing 500-2500 Custom Printed Gift Cards)

Card Services & Costs

500 Cards

1000 Cards

2500 Cards

Number of Cards Sold

500

1000

2500

Cost Per Card

$ 1.51 x 500

$ 1.40 x 1000

$ .65 x 2500

Total Card Costs

$755.00

$1,400.00

$1,625.00

Transaction Costs (Includes 4,000/Yr)

$40/Mo.

$40/Mo.

$40/Mo.

Annual Transaction Cost

$480.00

$480.00

$480.00

Merchandising Tools

Included

Included

$500.00

Program Set-Up Fee

$500.00

$750.00

$1,000.00

Total Cost

$1,735.00

$2,630.00

$3,605.00

Profit On Gift Card Sales (Selling 500, 1000, 2500 Gift Cards)

Profit Item

500 Cards

1000 Cards

2500 Cards

Average Activation Amount

$ 50 Per Card

$ 50 Per Card

$50 Per Card

Total Value Stored on Card

$25,000.00

$50,000.00

$125,000.00

Customer Spends 33%

$8,250.00

$16,665.00

$41,250.00

More Than Value On Card

 

 

 

Total Revenue

$33,250.00

$66,665.00

$166,250.00

50% Profit Margin

$16,625.00

$33,325.50

$83,125.00

12% Un-Redeemed

$3,000.00

$6,000.00

$15,000.00

Program Profitability

$19,625.00

$39,325.50

$98,125.00

Total Cost (From Above)

($1,735.00)

($2,630.00)

($3,605.00)

Net Profitability

$17,890.00

$36,695.50

$94,520.00

 

 

 

 

 

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