Guns, ammunition and shooting accessories are the bread and butter of every firearm dealer, but they aren’t without downside. Most notably, these products often require significant storage and display space, have low profit margins, and can be difficult to both stock and keep in stock thanks to the current supply chain crisis. However, there is another item that can not only compete with these core products, but costs less to purchase and can make more money for retailers. Of course, we’re talking about gift cards.
A $170 billion industry in the U.S. last year, the gift card market has grown rapidly throughout the pandemic, powered by store shutdowns, social distancing, increased holiday spending and a trending “pay now, buy later” consumer mentality in response to retail stockouts. Consumers are also purchasing more gift cards per year than ever before, giving FFLs even more reason to invest in the gift that keeps on giving.
If your firearms business is not already offering gift cards, here are five reasons to start in 2022:
5 Reaons to Sell Gift Cards
Gift Cards Are Affordable
Even at dealer cost, firearms, ammunition and shooting accessories can be expensive for dealers. These products are also expensive to store and display, taking up valuable square footage that could otherwise be used for other products, classrooms, offices or other services. Gift cards, however, cost a fraction of the price.
When purchased in bulk, gift cards can cost less than 25 cents per card – less than the going rate for 9mm per round right now. Gift cards also take up significantly less space as they can be easily stored under retail counters and in storage cabinets until needed. And when collected and zeroed-out, gift cards can be reused for other customers, extending their lifecycle and giving retailers greater bang for their buck.
Gift Cards Build Brand Awareness
While not just purchased for others, gift cards are a great tool to expand your existing customer base. With the help of commercial printing companies like Duracard, your FFL logo can be added to every card to further promote your business and build your brand like a wallet-sized billboard.
Speaking of wallets – gift cards also serve as physical reminders for cardholders, keeping your business top of mind and improving the odds the gift card is used.
Gift Cards Create Repeat Customers
Often purchased as gifts, there’s a good chance the gift card recipient has never stepped foot in your gun store. This is the perfect opportunity to not only sell to this first-time customer, but also create a repeat and loyal customer. Consider the gift card the cost of customer acquisition in hopes of seeing and selling to them again.
Gift cards are also an easy sell to regular customers – especially families of regular customers – who can use the cards to pay for everything from guns and ammo to range time and gunsmith services.
Gift Cards Encourage Spending
Though gift cards hold a predetermined value, that doesn’t mean customers can’t or won’t spend more at your store. In fact, recent studies suggest customers spend an average of $59 more than the value of their gift card.
Viewed as “free money,” customers are more likely to spend the value of their gift card on top of the dollar amount they originally intended to spend on, for instance, a gun, giving your sales staff upsell opportunities. Customers may also find additional shooting accessories or cleaning supplies while shopping they hadn’t anticipated on buying that puts them over their card’s value. Either way, it means more profit for your FFL.
Gift Cards Are Versatile
Gift cards are an alternative form of payment, but their value and use go far beyond that of everyday transactions and holiday gifts. Gift cards can be used as payment in firearm trade-ins and consignment sales, offering sellers money in return that can only be spent at your store. Gift cards can also be used as added value to retail sales, membership signups and referrals, giveaways and other promotions. And gift cards can be spent in-store and online, allowing customers to take advantage of ecommerce offerings with a safe payment method.
Between the growth of the gift card market and their benefits for your business and its customers, there’s never been a better time to implement a modern gift card program. Contact Orchid today to learn how your retail FFL can use gift cards to grow brand awareness and profits easily and affordably with Orchid POS™.