Gift cards are the ideal early Xmas present for hospitality operators

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Xmas maybe nearly half a year away but astute hospitality operators are already planning for the festive season and compiling their own shopping lists. One of the best presents they can buy themselves would be a gift card solution to boost revenues and increase customer engagement, writes Niels Nielsen, managing director of EPOS specialists GS Systems.

Traditionally this lucrative market, worth an estimated annual £5bn according to the UK Gift Card & Voucher Association (UKGCVA), has been the exclusive preserve of big multi-national companies.

However, this is no longer the case. Independent hospitality operators and small chains can now retail gift cards cost effectively without a large intimidating capital outlay.

Unredeemed cards represent a 6% windfall for operators 

There are wide-ranging benefits for hospitality operators.

Our experience with our clients shows they can anticipate substantial revenue increases as their customers spend above the amount on the card.


They will also enjoy higher margins. Research reveals one in three of us buy a full-price rather than discounted item when using a gift card.

According to market analysts Mintel, retailers will save an estimated £65m a year in loan interest gift card payments are paid in advance.

Remarkably, industry statistics also reveal that nationally £250m spent on cards is unredeemed, the equivalent of a 6% windfall for retailers.

49% or consumers said they would be likely to give a gift card.

Customers love them as well

Figures in the USA supplied by the Merchant Advisor claim that 70% of consumers will sent more than the value of the card, 72% of consumers who tried a business for the first time because they received a card will return and 41% of consumers who tried a retail store, restaurant or a hotel for the first time because they received a gift card for that business. A National Retail Federation survey found that 60% of respondents hope to receive them as Xmas presents.


Some 57% of consumers in 2014 are likely to give a gift card or voucher as a gift this Christmas according to new figures released by The UK Gift Card & Voucher Association. The survey of 2,000 consumers shows that the percentage has grown from last year when 49% or consumers said they would be likely to give a gift card.

Cards have no value until swiped through a magnetic card reader 

So how do you take a slice of the lucrative gift card market?

Hospitality operators have a couple of options if they want a solution from us. They can have a gift card scheme as a standalone product or one that operates within an EPOS-based business management solution where automatic reporting tracks gift card transactions and redemptions.


All they need to get started is an internet connection, a tablet or a PC with a connected magnetic card reader and a supply of numbered pre-printed blank gift or reward cards with a magnetic strip.

These pre-paid cards, which have unique reference numbers for tracking, are worthless until they are swiped through the magnetic card reader and a cash value is uploaded.

Gift cards can add increase sales by 30% compared to paper card solutions 

Even better, the costs involve a small set up charge and monthly fee plus the price of the cards and the marketing of the solution.

Once set up, operators simply sell gift cards online via an operator’s website and their social media platforms or at the point of sale.

We have found that introducing a gift card programme can increase sales by 30% versus existing paper card solutions while mature programmes can deliver between 3-5% of a total company’s revenue.

That’s plenty of food for thought as you plan for the Xmas season later this year.


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