Gift cards or discounts? What works best for your business?

In a time when competition for customers is intense, many business owners face the choice between offering gift cards or discounts as a sales strategy. With modern solutions like WeOrder and an efficient POS system, both options are easy to implement, but which strategy provides the most value for your business?

Gift cards: Advantages and opportunities

Gift cards represent more than just a prepaid value. They create a range of unique business opportunities:

Economic advantages

Gift cards provide your business with several significant economic advantages. You receive payment upfront, which improves your cash flow. Statistically, customers often spend more than the value of the gift card, which increases your average order size. Additionally, around 10-15% of gift cards are never redeemed, which directly impacts your bottom line.

Customer loyalty and branding

Gift cards act as little ambassadors for your business. They:

• Introduce new customers to your business  
• Strengthen your brand through physical presence  
• Create reasons for repeat visits  
• Increase awareness of your business

Discounts: Strengths and strategies

Discounts can be a powerful tool for driving sales and customer engagement:

Immediate sales effect

Discounts have a direct and measurable effect on sales. They can:

• Attract new customers  
• Increase sales during slow periods  
• Reduce excess inventory  
• Create immediate customer activity

Flexibility in marketing

Discounts allow you to be agile in your marketing. You can quickly:

• Respond to competitors' actions  
• Adjust campaigns as needed  
• Test different pricing strategies  
• Target offers to specific customer segments

Comparison of effects

To choose the right strategy, it is important to understand the different effects:

Giftcard

• Long-term customer value  
• Higher average order size  
• Prepaid revenue  
• Potential unredeemed value

Discounts

• Rapid revenue effect  
• Lower margins  
• Risk of value erosion  
• Immediate competitive advantage

Implementation in your business

Regardless of which strategy you choose, successful implementation is crucial:

Technical integration

A modern POS system makes it easy to:

• Manage gift cards and discounts  
• Track effects and results  
• Integrate with loyalty programs  
• Analyze customer behavior

Strategic timing

Timing is crucial for both strategies:

• Gift cards are especially effective around holidays  
• Discounts can be used to boost slow periods  
• Both can be combined in seasonal campaigns

Best practices and recommendations

To maximize the effect of your chosen strategy:

When using gift cards

1. Offer different values and designs
2. Create special gift cards for holidays
3. Integrate with digital solutions
4. Train staff to promote gift cards

When using discounts

1. Set clear goals for each campaign  
2. Limit the duration  
3. Clearly communicate the terms  
4. Continuously measure the effect

Conclusion

The choice between gift cards and discounts does not have to be an either-or situation. The optimal strategy often combines both tools at different times and for different purposes. The most important thing is to:

• Understand your target audience's preferences  
• Choose solutions that fit your business model  
• Implement professional systems for management  
• Measure and analyze the effects continuously

With the right tools and a well-considered strategy, both gift cards and discounts can become valuable instruments in your toolbox for customer attraction and revenue growth.