Yes. Yes is the answer. They are way, WAY better. Here's why:
Paper certificates are difficult to market. If you put them on the countertop where everyone can see them and impulse buy, you're likely to lose them to shoplifters. But even idiot shoplifters know that gift cards are worthless until activated. So you can plant a big pretty display full of gift cards without risk. On display = impulse buying. Where are the paper certificate stored? In a drawer, where everyone forgets about them.
Paper certificates are paper. Let's face it; they don't look as good. If paper certificates were the better idea, then all the most profitable retailers in the world would be using them instead of pretty plastic cards. Which would you rather receive as a gift?
Tracking paper certificates is a nightmare. Electronic gift cards are automatically tracked and reported in a format that your bookkeeper will appreciate.
Electronic gift cards aren't expensive anymore. When they first came out for small businesses about 15 years ago, the average cost for a small merchant to set up a gift card trackng system including card production, was a little over $18,000. Now for a subscription fee of $60 per month (which includes the cards, design, terminal and tracking) you can sell gift cards to your customers.
Breakage. This refers to the 18% of all gift cards that are never redeemed. When a customer comes in with a paper gift certificate they expect change in cash if they don't use the full value. Major retailers have trained gift card consumers to just save the remaining balance for their next visit. Some people never come back, or they lose the card, making that money remaining on the card pure profit for the business. Others save the card for future use. And that makes for a return customer. Either way the business wins.
So gift cards are far more profitable for the business. They are far more appealing to the customer. They make the business 18% bonus profit in breakage. They are no longer expensive to produce and track. And finally they earn the business more customers.
I'm not just trying to sell my wares. Gift cards really do make a difference. But they're not for all businesses. Give us a call and we'll create a profit projection for your business.