Can You Profit From The New Gift Card Trend?

“Big Box” stores like Wal Mart and the big retailers aren’t the only ones who’ll be selling gift cards this Christmas.

CNN/Money reports …

For truckers who haul Santa’s loot to stores all over the country, what better way to express your gratitude than with a 7-Eleven gift card, for an 18-pack of Bud Light, or maybe a Slurpee?

Or, if you need an excuse to make over your “shaggy” someone special, how about a gift card for a buzz from Regis salons.

Whether these gift ideas suit you or not, the growing demand for gifts cards has merchants of all sorts scrambling to get in. The result is a flood of new branded cards in the $45 billion gift card business clamoring for your attention over the holidays.

Bob Skiba, executive vice president with Stored Value Systems (SVS), is forecasting an “explosion” of gift cards sold through outside parties the next two months, including cards from supermarkets, drug stores and yes, even gas stations.

The company is one of the biggest providers of gift cards and card programs to about 350 retailers, including the Gap, Limited Brand, J.C. Penney’s, Costco and Exxon-Mobil.

“In five years we’ve gone from 1,500 locations to 75,000 locations outside of malls, department stores and specialty stores that also sell gift cards,” Skiba said. “We’re working with spas, restaurants and convenience stores. With this phenomenal growth, we’re producing 25 percent more cards than we were for the same time last year.”

Restaurant chains Arby’s, Hardee’s and Carl’s Jr. will also debut holiday gift cards, Skiba said. “One of the more innovative cards is from Regis Hair Salon. You can actually put a picture of yourself on it,” he said. Arby’s, Hardee’s, Carl’s Jr. and Regis Hair Salon are all clients of SVS.

For budget-tight consumers, the expansion of gift cards into non-traditional channels offers the benefit of “one-stop” shopping.

How?

Stopping for gas on the way home, a harried holiday shopper can fill up, pick up a few groceries, and also grab a few gift cards, like a 7-Eleven (Research) card, or an online shopping card from American Express. The cards can be used in lieu of cash.

“This is great for your non-typical holiday merchants because it will bring customers who maybe have never stepped into their stores,” Skiba said

“Convenience stores and supermarkets could divert gift money away from the classic gift channels,” said Candace Corlett, retail analyst with WSL Strategic Retail.

“Earlier, retail chains would’ve competed with each other or with the larger department stores for gift sales. Now they have to compete with anyone who sells gift cards.”

According to a recent holiday spending survey from the National Retail Federation (NRF), gift cards ranked as the third most desirable category on consumers’ wish list after CDs/DVDs and clothing.

“It used to be insulting to give cash in an envelope but gift cards have taken the stigma out of it,” said WSL’s Corlett.

The only drawback for merchants is that they have to wait until the cards are actually redeemed before they log the transaction as revenue.

Actually any home business or small business can create their own gift cards… you just have to decide if the price is worth it for the volume you do.

A resource like Andreoni’s let’s you design and plastic cards. (I got them by Googling the term “plastic business cards”… I’ve never used them so I can’t vouch for them. Search for that term and you’ll find many options.)

Or you can have good old fashioned “gift certificates” made.