Offering gift cards can provide a significant advantage for salons. They help increase revenue from existing clients and attract new customers who may become loyal patrons, providing a valuable opportunity to expand your client base. Gift cards also help foster brand loyalty, customer satisfaction, and operational efficiency, creating a reliable revenue stream that can be strategically reinvested.
As salons strive to tap into this lucrative market, understanding the dynamics of gift cards and the advantages of promoting them is crucial. By examining the growing trend of gift cards, you can uncover strategies to maximize your salon’s potential and achieve financial success.
The Rise of Gift Cards
Gift cards are big business and have become increasingly popular among consumers. In 2024, gift card sales in the United States were estimated to reach $214.3 billion and could reach $267.3 billion in sales by 2028.
According to Data Bridge Market Research, one primary reason for the rise in the popularity of gift cards is the desire for convenience. Another noteworthy trend is the increasing popularity of e-gift cards, particularly among millennials. With social media and various digital platforms, engaging with customers online has become essential, making sharing and sending virtual gifts easier.
Gift Card Trends
According to a 2024 study, 83% of U.S. consumers planned to purchase gift cards, highlighting their increasing popularity in the market. There is some lingering concern that gifting a cash amount may be impersonal. Research and the growing sales of gift cards beg to differ. A recent survey found that 96% of surveyed consumers reported feeling happier or equally satisfied with gift cards compared to physical gifts. Additionally, a report from the National Retail Federation indicated that gift cards are the most requested item on consumers’ wish lists, with 53% of shoppers asking for them in 2024.
Beyond the rise in gift card sales, there is the added advantage of additional spending. Among individuals redeeming gift cards, 59% spend more than the value of the card. Previous research has shown an average overspend of $81 for every $100 gift card used. This trend highlights the potential for increased revenue when clients use gift cards for products and services at your salon.
Financial Buffer
Unused gift cards account for billions of dollars each year. In fact, Americans have a total of $27 billion in unused gift cards nationwide, with over 40% of individuals possessing at least one unused gift card, voucher, or store credit. As of 2024, the average consumer holds $244 in unused gift cards, an increase from $187 in 2023.
To manage the cash flow from gift card sales, salons may want to open a dedicated bank account for gift card revenue and transfer any proceeds, withdrawing only when card redemption occurs. This strategy can help avoid financial strain if people redeem gift cards during slow seasons. A dedicated account allows you to build a financial buffer that can be reinvested in the business or borrowed to cover expenses during lean periods.
Impact on Revenue
Gift cards can be a significant source of income for any business, contributing an average of about 5% to a company’s total revenue. Businesses, including salons, can further boost their sales by incorporating gift cards into payment options and marketing strategies such as loyalty programs. Some companies with effective gift card programs have seen gift cards account for as much as 8% of their overall revenue, demonstrating the importance and advantages of a well-managed program for financial success.
While an average contribution of 5% may seem modest, the potential for substantial sales through gift cards relies on creative promotions. A prime example is Copperfalls Salon in Castle Rock, Colorado. On Cyber Monday in December 2024, this Aura Salonware salon ran a one-day promotion where clients could purchase a $150 gift card and receive a $50 bonus card for personal use. This timely offer, advertised through social media, text marketing, and email marketing, provided the perfect combination of holiday gift-giving and self-care. For their efforts, the salon earned $55,000 in virtual gift card sales in just nine hours. If you’re doing the math, that’s over 360 virtual gift cards!
Building on their success, Copperfalls Salon held a flash sale for in-salon gift cards on December 19th, just days before Christmas and the start of Hanukkah. In just five hours, they sold an additional $20,500 worth of gift cards.
Gift Card Strategy
To realize your own success with gift cards, create an ongoing plan for promotions throughout the year. Start with some of the basics and work your way up from there:
- Rally your team: Encourage staff to prompt gift cards.
- Gift card displays: Create signage in the salon—at the front desk, on stations, and in the retail area—to inform clients that gift cards are available.
- Be everywhere clients look: List gift cards on your salon menu, website, link in bio for social media, and client app for online booking.
- Reach out: Market gift cards using all channels, including text, email, and social media.
Promote Digital Cards
In 2024, digital gift card sales surpassed physical gift card sales for the first time, and the trend is expected to continue growing. To meet this demand, offer a combination of physical cards and e-gift cards for clients who prefer them. Make the purchasing process seamless for clients, including convenient options accessible via their smartphones.
- Prioritize online sales: Ensure your client app provides a seamless and secure digital gift card purchasing experience.
- Offer various delivery options: Provide the means to deliver digital cards by email or SMS.
- Promote digital gift cards: Highlight benefits such as immediate delivery and reduced waste in your promotions.
Integrate Gift Cards with Your Loyalty Program
Gift cards are vital to loyalty programs, encouraging client engagement and fostering customer loyalty, which can result in repeat business and increased overall sales. Loyalty program members, on average, spend up to 18% more than non-members. Here’s how to leverage this relationship:
- Reward purchases: Offer bonus points for gift card purchases.
- Redeem loyalty points: Allow customers to redeem their loyalty points for gift cards.
- Promote gift cards to loyalty program members: Offer exclusive gift card deals and promotions to loyalty program members.
Promotion Ideas
Consider implementing special offers to encourage customers to purchase gift cards. Use your marketing channels to promote these incentives and make redemption easy, then track their effectiveness and adjust accordingly.
Suggested Promotions for Selling Gift Cards to Salon Clients
According to giftcards.com, birthdays are the most common occasion for gift card purchases, followed by December holidays and Mother’s Day. However, there are numerous opportunities to promote gift card sales year-round. Here are some suggestions:
- Birthday Bonuses: Celebrate clients’ birthdays by offering discounts or bonuses when they buy a gift card for themselves or others. For example, if they purchase a $100 gift card, they could receive an additional $10 off their next visit.
- Holiday Packages: Design seasonal promotions for significant holidays (e.g., Christmas, Valentine’s Day, and Mother’s Day). Include exclusive holiday-themed gift card designs and bundle them with service offers, such as a free add-on treatment when the recipient redeems the card.
- Day-of Opportunities: Get creative for other occasions to promote gift cards. For example, promote Teacher Appreciation Week to all clients who are parents, National Boss’s Day, Administrative Professionals’ Day, and Employee Appreciation Day to those in corporate positions, or Nurses’ Week to medical professionals.
- Digital Gift Card Discounts: Encourage online purchases of digital gift cards by offering discounts, such as 5-10% off, highlighting the convenience and immediate delivery options. You can also offer volume discounts, provide bonus gift cards with a minimum purchase, or create exclusive packages that combine gift cards with other services.
- Loyalty Program Integration: Create a system where clients earn loyalty points for every gift card bought. For example, for every $50 spent on gift cards, they receive 10 loyalty points redeemable for future services.
- E-Gift Card Promotions: Promote the advantages of e-gift cards, including free delivery via email or SMS, to ensure customers view this option as an efficient and eco-friendly gift choice. Even better, plan your promotion around Earth Month in April to raise awareness of your salon’s sustainability efforts.
- Encourage Wellness: Promote gift cards specifically for spa services in honor of National Wellness Month in August.
- Limited-Time Offers: To generate urgency, set up a limited or time-sensitive promotion. Introduce promotions in which customers who purchase gift cards within a specific timeframe receive a bonus, such as a complimentary service or product, on their next visit.
- Charity Tie-In: Collaborate with a local charity and donate some of your gift card sales to it. This initiative will allow customers to feel good about their purchases while supporting a worthy cause.
- Social Media Contests: Host social media contests where participants can win gift cards by sharing their posts or tagging friends. This fun promotion will increase engagement, promote visibility, and generate awareness of your gift card program.
- Partner with Local Businesses: Provide discounts on gift cards when purchased in volume. They’re perfect for employee appreciation, anniversaries, and other milestones.
- Exclusive Promotions for First-Time Buyers: Offer special discounts or bonus services for clients purchasing a gift card for the first time. This approach can attract new buyers and encourage them to explore your salon’s offerings.
Implementing these promotions can attract more clients to purchase gift cards, boosting revenue and fostering a deeper connection with your salon. This enhanced customer engagement is a key factor in the success of your promotions.
Monitor Your Success
It is essential to track and analyze the success of each gift card campaign. Set up tools to monitor the number of gift cards sold, revenue generated, and overall campaign performance. Use analytics to gather data on customer behavior, such as the channels used to purchase gift cards, the average value of the cards bought, and customer demographics. Analyzing this data will help you identify trends, insights, and areas for improvement.
Evaluating your campaign’s return on investment (ROI) is a critical part of the process. Comparing the revenue generated to the costs incurred in running campaigns yields valuable insights. Use these insights to make informed decisions about future gift card campaigns and optimize your marketing strategies.
Additionally, once you’ve completed campaigns for a year, compare their performance year over year. This comparison is not just a formality; it helps you track growth over time and guides future decisions.
