Top 5 Reasons to Include a Loyalty and Gift Card Program

In today’s retail world now, you can use your Point-of-Sale terminal to load and redeem both loyalty and gift cards. There are super reasons to add loyalty and gift cards to creating a digital love fest between your business and your customers.

Wineries and distilleries alike believe in promoting customer loyalty and finding creative ways of tackling that broadly defined goal. Many platforms utilize mobile rewards or coupons to get repeat business and “court” the customer. Vendors integrate loyalty cards in various ways depending on factors like program goals and intended customer base. Following are five reasons wineries and distilleries should consider adding loyalty and gift cards for their hyperlocal programs.

1. Loyalty and Gift Cards Drive Superior Consumer Behavior

Via research, customers behave differently when spending with loyalty/gift cards, as there is a psychology of “the money is already spent” in this scenario. When using a Loyalty/gift card consumers tend to reach to the more expensive items when using a loyalty or gift card. Overspending also tends to occur. It’s hard to max out a card to the penny, usually, consumers spend more that is above the card’s stored value. According to Omri Dahan of Margeta, it’s about 25% or higher.

2. Stronger Emotional Memory

If you credit $5 or $10 onto a credit card or to your bank account, what happens? Essentially it gets lost into that account, so the consumer never really realizes the cash back effort. It is simply lumped into all the other cash in the account. On that note, how can future purchasing behavior be motivated by a reward you don’t even remember and really have no emotion to? Using virtual currencies and loyalty/gift cards over cash back offers is the better way to go.

3. Higher Perceived Value

Loyalty/gift cards hold a different connotation altogether. People receive gift cards or loyalty cards on special occasions with the feeling of the card itself that the plastic is a “store of value”. With a coupon, it is seen as “useless” or as a piece of paper or a transparent effort to drive sales. It is perception where the perceived value of a card simply drives higher conversion rates, even up to 25% or more than with a coupon. Zack Smith of Boomerang says, “they get people in the door, and they protect the brand positioning what’s essentially a discount as a gift or earned reward.”

4. Convenient for Customers

Tying both loyalty and “store” value together is something that is very powerful for businesses, and, also extremely convenient for customers. There has been strong traction and consumer adoption so Active thinks this is a logical extension for wineries/distilleries loyalty service. According to Chris Luo of Five Stars, “certainly Starbucks has done a great job of proving value by using loyalty incentives to increase “pre-paid” purchases over 25% of US transactions are now
delivered via Starbucks pre-paid cards that also accrue loyalty points.”

5. Lower Fees

Finally, there is an additional retailer benefit when swiping a gift/loyalty card – lower credit card fees. Gift cards are typically processed on different payment “rails”, they don’t trigger swipe fees the way typical credit card transactions do. However, when a retailer first sells a gift card, it still pays interchanges on the entire amount (and even a higher costs if distribute cards via a 3rd party. There is a perception by “retailers” that loyalty/gift cards are “cheaper” to process which is true but probably less than people think.

Active is about to launch a loyalty/gift card program within the current mobile POS system. Stay tuned for the upcoming release detail. If you want the ultimate in service, speed, security and support, Active has you covered. Active’s easy iPad POS is designed for busy winery tasting rooms, craft beverage businesses, and retail locations. It includes powerful club features, inventory management, alcohol shipping, tips functionality, and kitchen/fulfillment printing built right in. Active’s native app allows you to communicate live with your unique master database, so it is always current with customer and inventory data.

To request a Demo: Contact Thomas@activeclubsolutions.com directly. Or, visit our website for more information at www.activeclubsolutions.com.

 

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