When in doubt, buy a gift card. It’s a safe and convenient gift-giving option, with 32% of consumers purchasing seven or more a year. Gift cards foster brand loyalty and attract new customers. However, they also pose a formidable challenge: the accumulation of outstanding, unused balances.

Enter the concept of gift card redemption campaigns, a strategy designed to motivate customers to redeem their gift cards and alleviate the financial and inventory pressures unused gift cards place on businesses.

The dynamics of gift card economics

Gift cards are a valuable asset in eCommerce. From a revenue perspective, they provide up-front capital, often leading to overspending when the card is redeemed. In terms of customer loyalty, they encourage repeat business and provide an opportunity to gain new customers.

However, the accumulation of unused gift cards causes issues. These cards represent debt — merchandise or services the company owes. This can become problematic if many cards are redeemed at once, which could disrupt inventory management and overall business operations.

Why gift card redemption campaigns are essential

Gift card redemption campaigns remove the risk and worry associated with these potential challenges. When meticulously planned and effectively executed, these campaigns offer several benefits, such as:

• Manage the timeline of gift card redemptions: By encouraging customers to use their gift cards within a certain period, you can better predict and handle the potential influx of redemptions. This control can significantly ease the strain on your inventory management and maintain smoother business operations.
• Create opportunities for upselling and cross-selling: When customers visit a site or store to redeem their gift cards, they’ll likely explore other products. You can take advantage of their browsing by showcasing new or popular items, providing product recommendations, and assembling attractive deals and bundles. This strategy often results in customers spending more than the value of the gift card, boosting overall sales.
• Offer customer behavior and preference insights: Glean valuable data by tracking which products are most frequently bought with gift cards, what additional items customers purchase, and what incentives are most effective in driving redemptions.

These insights can then tailor your future marketing efforts and product offerings more effectively.

First-party customer data is key to eCommerce success. Check out MyFBAPrep’s guide to ​​Understanding the Importance of Customer Data.

Planning your gift card redemption campaign

Planning a successful gift card redemption campaign is a meticulous process. Here’s a step-by-step guide to help you cover all bases.

Set clear objectives

What do you aim to achieve through your campaign? This could be reducing the number of outstanding gift cards, increasing sales, driving customer engagement, or acquiring new customers.

Defining clear objectives serves as the foundation for your campaign and guides all subsequent decisions.

Identify the optimal time for your campaign

Based on historical sales data and market trends, determine when your customers are most active and likely to redeem their gift cards. This could be during a holiday season, annual sales events, or specific days of the week.

Timing your campaign with these periods can boost its success.

Design your campaign

Next, consider the various elements that’ll shape your campaign, including:

• Duration: Will your campaign last a week, a month, or span several months? The length of your campaign should align with your objectives and your customers’ shopping habits.
• Incentives: What will motivate your customers to redeem their gift cards? Consider offering additional discounts, reward points, freebies, or other perks that are relevant to your buyers’ interests.
• Promotional channels: Pick the channels you’ll use to communicate your campaign to your customers. These might be email, social media, website banners, or direct mail.

Necessary tools and resources

A successful campaign requires the right tools and resources.

You might need a customer relationship management (CRM) system to manage customer data and personalize communications, email marketing software to distribute campaign messages, and social media management tools to track and schedule promotions. Ensure you have the appropriate tools in place before launching your campaign.

Develop a monitoring and adjustment plan

Before you kick off the campaign, have a plan to monitor its performance and make necessary adjustments. Define key performance indicators (KPIs) that align with your campaign objectives and decide how often you’ll review these. Also, plan for different scenarios and how you’ll adjust your campaign strategy in response to these.

Planning a gift card redemption campaign can be a significant undertaking, but following these steps will ensure your campaign is well structured, strategically targeted, and primed for success.

Executing and monitoring your gift card redemption campaign

Once you’ve planned the details of your gift card redemption campaign, the next step is to set the wheels in motion and execute it.

The success of your campaign relies heavily on how well you launch it and your ability to adapt and modify the campaign based on its performance.

Promote your campaign

Promotion is the lifeblood of your campaign. It’s essential to communicate effectively with your target audience through the right channels, including:

• Email marketing: Send personalized emails to your customers informing them about the campaign. Make sure to highlight the benefits they’ll gain from participating and include all necessary details, like the time frame, incentives offered, and terms and conditions.
• Social media: Use your social media platforms to spread the word about your campaign. Create engaging posts with compelling visuals to attract your followers’ attention. Be sure to use relevant hashtags as well to increase your posts’ reach.
• Website banners: Place banners on your website to catch visitors’ attention. You can place them strategically on your home page, product pages, or at checkout.

Incentivize your customers

Incentives are a driving force that motivate your customers to redeem their gift cards. The right incentives can increase the success rate of your campaign significantly. Consider employing:

• Tiered rewards: Offer additional rewards based on the amount spent. For instance, you could offer a 10% discount if they spend more than the gift card value or a free product if they spend a specific amount.
• Bonus points: Give customers bonus points that they can redeem on future purchases. This not only encourages gift card redemption but also repeat purchases.
• Extra discounts: Offer extra discounts on selected product categories. This can also help you move inventory for specific products.

Monitor your campaign

It’s essential to monitor the performance of your campaign continually. Regular tracking allows you to understand if the campaign is effective or if there are aspects that need tweaking. Some valuable KPIs to monitor are:

• Redemption rate: The number of gift cards redeemed during the campaign versus the total number of outstanding gift cards
• Customer acquisition: The number of new customers acquired during the campaign period
• Average order value: The average amount of money customers spend when they redeem their gift cards (this can help you understand if your upselling and cross-selling tactics are working)
• Customer retention rate: The number of customers who make additional purchases after redeeming their gift cards

Make necessary adjustments

If the campaign fails to meet its objectives, or if there’s an opportunity to enhance its results, you can and should make necessary adjustments. This might include modifying the incentives, changing the promotional message, or using different channels.

The key to a successful campaign is to remain flexible and adaptable to changing dynamics and customer responses.

Incorporating MyFBAPrep’s approach into your gift card redemption campaigns

One effective way to encourage gift card redemptions is by offering fast or free shipping for this action. As online shoppers increasingly value quick and free shipping, this is a solid incentive to motivate customers to redeem their gift cards.

MyFBAPrep offers this and other services that can significantly strengthen your gift card redemption campaigns. With our robust inventory management and fulfillment solutions, you can maintain diverse and plentiful inventory to provide your customers with ample choices and increase the chances of them redeeming their gift cards. Once they commit to purchasing with their gift card, let our team handle the order fulfillment, be it picking and packing or speedy delivery — and everything in between. Your buyers will enjoy a first-rate shopping experience from start to finish, and you take on none of the burden.

Wrapping up — Ready to launch a successful gift card redemption campaign?

Gift card redemption campaigns are essential for eCommerce retailers to manage their financial obligations for outstanding gift cards and gain more control over their inventory.

By following the steps outlined in this guide, you can design, implement, and manage a campaign that secures more gift card purchases. Remember, the right tools and strategic partnerships play a crucial role in the success of your campaign, so analyze your needs and research your options before committing.

Start planning your redemption campaign today and take control of your outstanding gift cards to improve your sales and strengthen your customer relationships.