Return on Investment Net Revenue per Location Based on Annual Sales   250 Cards 500 Cards 1000 Cards Avg sale per card at $50.00 each $ 12,500 $ 25,000 $ 50,000 Customer spends more than value of card x $10.00 $ 2,500 $ 5,000 $ 10,000 Total Sales $ 15,000 $ 30,000 $ 60,000 Cost of Goods sold at 50% costs ($ 7,500) ($ 15,000) ($ 30,000) Gross Profit $ 7,500 $ 15,000 $ 30,000 15% Breakage from unredeemed cards $ 1,875 $ 3,750 $ 7,500 Net Revenue $ 9,375 $ 18,750 $ 37,500

Consider this...

Gift Cards are not just for the holiday's it a year round marketing opportunity to build business and gain customer loyalty.

Gift card sales will hit an estimated $17.34 billion during the 2004 November-December holiday season, up from $100 Million last season.
National Retail Federation

70% of U.S. households surveyed participate in some form of loyalty programs and 83% of these households use them every time they shop at those stores.
ACNielsen

74% of consumers surveyed said they planned to buy gift cards during the 2004 holidays.
National Retail Federation

Raising customer retention rates by 5% could increase value (profits) by 25% to 100%.
Bain & Company

The average gift card purchaser planned to buy more than 3 cards and spend about $108.28 during the 2004 holiday season.
National Retail Federation

More than half of all consumers- 50.2 % in an earlier survey said they would like to receive gift cards as a holiday gift, up from nearly 10% from just two years ago.

National Retail Federation

It costs as much as six to ten times more to acquire a new customer than to maintain an existing one.
Wall Street Journal

Retailers Perspective:

Christmas Eve 2001, a major retail home improvement chain sold 580,000 gift cards in 9 hours for a total value of $21 million. The $100 cards produced an average sale of $152, creating a 52% ticket lift.

Starbucks sold 2.3 Million cards in 45 days for $32 million in pre-loaded value. - Seattle Times, January 2002

Ruth's Chris Steakhouse had a 300% jump in prepaid gift sales in the first year. - Atlanta Journal-Constitution, August 2002

Win-Win Program
A well-structured gift and reward program is successful because it offers value to both the business and the customer.

The Business:

• Distributes a custom advertisement with built in value in customers' wallets
• Increases repeat business and average purchase amounts
• Builds a customer database for effective marketing
• Tracks spending habits to develop customer profiles

The Customer:

• Earns rewards that add up to future purchase value
• Receives special discounts from promotions
• Enjoys the convenience of giving and receiving gift cards
   

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