5 Reasons Plastic Gift Cards are Better Than Paper Gift Certificates

Yes, paper gift certificates still exist.

Last year, I purchased one as a Christmas gift for my dad. Granted, it was from an independent establishment in the United States, but paper certificates are still floating around.

If your business still utilizes paper certificates, it’s definitely time to move on and join the current gift card trend.

Here are five reasons why you should choose to offer a gift card vs. gift certificate:

1. You’re losing money with a paper gift certificate system

Picture this scenario: I come into your establishment, purchase something of lesser value than my gift certificate, and what do you give me in return? The cash difference. Now, imagine I return that purchase. Most establishments would also give me cash instead of a gift certificate.

 Plastic gift cards for your small business guarantee a certain amount of revenue because you can’t exchange a gift card for cash. Moreover, if you return an item, it’s credited to your gift card. And as if that wasn’t enough, a gift card is also re-loadable, while a gift certificate is not.

2. Plastic gift cards are more convenient

Let’s compare the convenience factor. Many gift cards are pre-loaded with a certain dollar amount, while most gift certificates require your cashier to enter in the information. This extends to when a gift certificate is redeemed. Since the process is not digital, it’s the cashier’s responsibility to hand over the cash and possibly run the math in their head.

A gift card works like a credit card; slide it through the credit card reader or scan it, and you’re done. Best of all, its size and shape also allows gift cards to fit conveniently inside any wallet.

3. Cards have greater appeal and allow for better branding

Gift cards have a wider appeal than a paper gift certificate. Offering plastic gift cards for your business relays a certain level of professionalism. The branding opportunities are far greater, as companies with gift cards have the opportunity to change up the sleek designs based on the season (think Christmas) or special occasions, such as birthdays.

4. Cards are easier to display

Establishments offering gift cards usually display them prominently. At these businesses, you don’t wonder if they sell gift cards because you can see them. Gift certificates never take center stage like gift cards do. Take my opening example. I didn’t see the certificates on display at the store. Instead, I had to ask the cashier if they offered gift certificates. She then had to fill in the amount I requested, and rip it from a booklet.

How many people never ask about gift certificates assuming they aren’t offered because they aren’t on display? That’s a missed revenue opportunity.

5. Cards have value beyond their initial balance

Going back to money, the majority of gift card holders spend more than the card value. Can the same be said for gift certificates? If the gift card holder knows they won’t see any of the value in cash, you can bet they’ll try to spend it all – with a good chance they’ll spend even more. You’re more likely to spend some of your own money if the gift card covers the majority of the cost. And even when customers don’t spend the entire amount, you still win due to breakage.

Curious to learn more about how you can set up a gift card program for your small business? Check out our handy guide on Creating a Gift Card System for Small Businesses.

'Gift cards continue to get increasing demand as a popular gift option all year long. Now is the time to make the transition. It may cost a little more upfront than gift certificates, but the dividends will make it worth the cost, not to mention the fact that launching a gift card program is an easy way to attract new customers and increase profitability.

Guest Contributor: Andrew Cauthorn, Marketing Specialist at DataLogic