The problem
Many gift buyers don't know a ring size or a taste, so they want a voucher, often at 10pm. If a shop without online gift cards misses 10 buyers a month in November and December who would spend $80£60€71A$115C$113 each, that's $798£600€714A$1,152C$1,128 a month going to a shop that sells them online.
What the AI does
Square Gift Cards lets you sell eGift cards on an online ordering page and in person, and redeem them in the shop or online through Square. There is no monthly fee and $0£0€0A$0C$0 to set up digital cards; you pay the normal processing fee when a card is bought, 1.4% + 25p for a UK card online. Square says cards don't expire and redemption is free. Physical cards are from $0.69£0.52€0.62A$1C$0.98 each if you want something to hand over at the counter. Put the gift card link on your website, Instagram and Google listing from November, and on a card by the till.
A worked example
An independent jewelry shop in York with the owner, a bench jeweller and one sales assistant already takes payments through Square. It sells eGift cards online from November and expects about 10 extra a month at $80£60€71A$115C$113.
Before
No online gift cards: about 10 buyers a month in November and December buy elsewhere
After
10 extra eGift cards a month at $80£60€71A$115C$113 = $798£600€714A$1,152C$1,128; card fees 10 x ($1.12£0.84€1A$1.61C$1.58 + $0.33£0.25€0.30A$0.48C$0.47) = about $15£11€13A$21C$21
What it's worth
About $359£270€321A$518C$508 a month in profit in November and December, at an assumed 45% margin on $798£600€714A$1,152C$1,128 of extra gift card sales once they're spent in the shop ($798£600€714A$1,152C$1,128 x 0.45). The 10 extra cards a month is an assumption, not a promise. There is no monthly fee; card fees are about $15£11€13A$21C$21 a month in the example.
How to set it up
- Turn on eGift cards in your Square account and choose the amounts to offer.
- Design the card with your shop name and a clear note that it can be spent in the shop or online.
- Add the link to your website, Instagram profile and Google listing before November.
- Train staff to redeem gift cards at the till and to check the balance for customers.
- Each January, look at how many cards were sold and how many have been spent.
What goes wrong
- Gift card money is owed to customers until it's spent; ask your accountant how to record it and how VAT applies, which depends on the type of voucher.
- Cards can only be redeemed through Square, so a second till system can't take them.
- A gift card bought at Christmas often comes back in January for a different item; make sure your returns and exchange policy covers gift card purchases.
- Card fees apply when the card is sold, so a very low-value card costs proportionally more to sell.