"Buy a gift card, support local" posts are multiplying again: restaurants, bookstores, yoga studios, microbrasseries. Quebec launched Le Panier Bleu in April to direct people toward local shops, and this week Quebec announced that the second wave has begun. We therefore expect to see many more of these posts before Christmas. Many people are buying, sometimes with no real plan to use the card. It is a way of showing support for the business.
Tourism businesses face a more difficult situation. A café can return to takeout. A dive resort in Indonesia, with borders still closed to foreign visitors, cannot open at all. Many of them are therefore considering the same idea in a different form: sell the trip now and deliver it later.
This is generally a sound strategy, provided it is applied carefully.
Does gift voucher money already belong to the business?
No. When you sell a voucher, the money deposited in your account is not yet fully yours: you owe a service. In accounting, this amount is recorded as a liability until the voucher is redeemed, and your accountant will confirm this.
During a shutdown, this money can feel essential, and sometimes it is. However, if you spend all of it to keep the business running and then cannot reopen, the people who bought vouchers bear the loss. They are your most loyal customers, precisely the people you want to protect.
The first question to ask is therefore: are you reasonably certain you will be able to honour this voucher? If the answer is uncertain, we recommend selling fewer, or none at all. This recommendation may seem strict, but it protects both your customers and your reputation.
Only sell what you're sure you can honour.
What terms should a voucher specify?
Most voucher problems come from vague terms. Write them down in plain language before you sell the first voucher, answering the following questions:
- What exactly does the voucher cover: a dollar amount or a specific service? If it is "two dives", does it include gear, the boat and the marine park fee?
- How long is it valid, and what happens if the business is still closed on that date?
- Can it be transferred to another person?
- Can it be refunded, and under what conditions?
- If prices rise before it is used, will it be honoured as sold?
Put the answers on the voucher page, in the confirmation email and on the voucher itself. Customers forget these details, and a voucher may be found in a kitchen drawer three years later, sometimes by a family member.
What are Quebec's rules on expiry dates?
In Quebec, it is important to know the rule before printing "valid for one year". Since June 30, 2010, the Office de la protection du consommateur has prohibited expiry dates on prepaid cards that work like cash, which covers most gift cards with a dollar value. Other provinces have their own rules, and several also prohibit expiry dates. The Wikipedia page on gift cards gives an overview of how much the rules vary from place to place. For any important question, check directly with the OPC. Cards for a specific service may be treated differently, and it is important to understand that distinction.
We recommend avoiding expiry dates even where they are allowed. A voucher that expires before the customer can use it is one of the fastest ways to turn a loyal customer into the author of a one-star review.
How can you encourage loyal customers to buy now?
Your best customers want to help; this is a pattern we observe consistently this year. Many will buy simply because you asked. A small incentive, however, makes the decision easier and shows that you are offering something in return.
Here are a few low-cost ideas:
- Added value. Pay $100, receive $115 in credit. Or, with the purchase of a dive package, the next dive is complimentary. You are offering future service, not cash leaving your account.
- Priority choice of dates when you reopen. For a tourism business with limited spots, this benefit is highly valued.
- A personal touch: a handwritten thank-you note, the person's name on a supporters' wall if they wish, or a photo from the reef.
Keep it measured. A 50 percent discount on future service may seem generous, but it amounts to selling your own reopening at half price. When you reopen, you will need your full revenue, probably more than ever.
How can you sell vouchers online simply?
This spring, many small businesses discovered they had no way to sell anything online. Their website served only as a brochure, and payments were taken exclusively at the counter.
Selling vouchers does not require a complex online store. It requires a page that explains the offer, a secure payment, an automatic email containing the voucher and a code, and an internal list so you know who bought what. Many booking and point-of-sale systems already include a gift card feature, often switched off. Check your system before buying a new tool. If your needs are greater, a small online store can handle vouchers, bookings and products in one place.
The next step is to inform your customers. An email to your list is more effective than any post. It should be short and transparent: the business is closed, here is how to support us if you wish, here is what you receive, with no obligation.
How should you track the vouchers you sell?
Manage them as a debt. It is an administrative task, but it is at this stage that many businesses are likely to run into difficulties next year.
Every voucher needs a number, a name, an amount, a date of sale and a status: used, partly used or not used. Keep this information in one place, a spreadsheet if that is the tool you have, and back it up. When you reopen, you will be busy and possibly short-staffed, and a guest will arrive with a printout from months ago. The goal is to be able to confirm their voucher in ten seconds.
Well managed, vouchers bring more than cash. They give you a list of people who paid in advance to come back to you, which is one of the most loyal customer lists a business can have. We recommend selling fewer vouchers and being able to honour every one of them.