Why should I sell via a reseller? You will cannibalise my business! You cost too much!

GCVA Blog
By Caroline Watson - Managing Director, Voucherline.com, TheGiftCardCentre.co.uk & Reward Panda.co.uk

These are just a few of the objections I have listened to in my nearly 25-year-old career in the world of gift vouchers, then gift cards and now digital too. I am a passionate old salesperson and marketeer. I remember when I started selling newspaper advertising in my 20s, my then Sales Manager bleating about “missed sales, missed opportunities, think of every single angle in order to get that sale”.  I still have this desire today. My team work hard to ensure that the brands who thought we were worthy enough to work with, get as many sales as we can find them. It’s the least we can do. We are honoured and proud to advertise their brand logos on our websites and platforms.

Now, more than ever, these brands need to get that footfall back into the high street and into their stores. It is more urgent now than it has ever been. I am sure you do not need me telling you that.

But that ‘Sales Prevention Society’ seems to be still going strong. Even now in this climate. Its members are in sales teams and in boardrooms across the country, who just don’t seem to see the bigger picture when it comes to that little piece of plastic or cardboard, or paper that you offer to customers. Your very own currency. 

So, let’s look at the world of the reseller. We are basically an agent for the brands, trying to get customers into their stores, via their gift cards or vouchers. We are not the enemy. Far from it. We are the lowest cost workforce in the UK. We sell you to our customers. And you only pay us if we get a sale.

An objection I hear the most, and indeed even this month we have a leading store pulling from all consumer facing gift card sites because their head office ‘wants all the consumer sales of gift cards on their website alone’, is that we will cannibalise their sales of their own gift cards.  

Wow. I am deeply flattered that a massive chain thinks that our websites are a threat to their brand. Believe me, Mr Brand, if someone wants your gift card, your website is the first place they will go to. No amount of SEO, Google AdWords, or cajoling would make them look elsewhere first. They arrive at reseller websites normally due to them wanting more choice or due to them not knowing what brand they want in the first place, so here they can see a raft of suggestions. And believe me, they bounce. They will look at your FREE entry on our website, they will then decide yes, this is good, and then skip off to your website to purchase. We see it a lot on our sites. You might be giving free postage due to your size and frankly the amount of sales you generate. We cannot.

Also remember, if you are not in front of them when they search, they will simply choose a competitor brand. These are gifters, they are not always loyal to your brand. They are buying for someone else, and so will often choose a gift card just because it’s there, or due to the person requesting. They also choose us for ease. At Christmas, over 83% of our customers have a multi choice basket when they checkout. Again. You are not there. Another missed sale. Shame on you in this climate.

Now let’s talk about cost. I am forever hearing Brands complaining that we cost them too much – usually from the ones that have reduced their discounts until we have to make the hard decision to remove them from our platforms. The latest one we did that to, had reduced their discount to 4%. Considering our average gift card load is around £35, that £1.40 is going to get us really excited

when we sell! Thanks! Not. You have now made your gift card discount so low, that it does not even cover our costs of order with credit card charges, staff, packing, and our own office overheads. So, you are taken off the platforms, and suddenly we are seeing everyone simply switch to your main competitor. Literally, within a day. Like magic.

I have to smile (through gritted teeth), when I know for a fact that this particular retailer is enjoying average margins of 100% and the rest, when they purchase their stock to sell in their stores, let alone when I walk into one of their shops and see their 50% off everything sale! Yes, they have rates, staff, overheads, but so do we all frankly. Stop trying to minimise your losses, with the easy go to option of your gift cards and resellers. Use your gift cards as your biggest marketing tool you have, to bring brand new footfall into stores, and to keep your loyal customers engaged when they are able to choose your gift card with a little discount on the reward and benefit platforms! Again, they are spending cash on you! Cash they would have seen going into their bank overdrafts normally and being spent on a gas bill.  

Fight for that cash coming to your store! Those margins you give to us resellers – turn it into marketing spend, and you will suddenly see just how profitable it is for you, as every marketing £ you spend with a gift card reseller, ensures a sale. How many marketing managers would LOVE that guarantee when they advertise on TV and on the underground? Every person who saw that ad spent in the store. The holy grail. Well it does with a gift card. And do not get me started on non-redemption. We know it occurs. Whether it’s only 1%, it’s still there. Free cash.

Gift cards can mean brand new customers in your store. Someone gave your currency to someone else to spend! Believe me they do not spend just that £35 on the card. The latest figures from our industry body, the GCVA, showed that on average there is a 67.1% uplift on a gift card purchase. So, another £24 spend on that £35 card we sell. And you did nothing for that sale. You just waited for it to come in. We worked for it on your behalf. So that discount of 10% you gave us (I wish!) on that £35 card? It truly cost you around 6% overall. Win win.

I also hear some of you saying, “oh we don’t see an uplift at all, they just spend the card value, so it is hard for us to justify the discount”. And? Why is this suddenly the resellers issue? We have done our bit and sent that customer into your store. If you cannot entice them further to spend more, this is not our problem frankly! You need to think differently about your currency.  

How about making everyone who has a gift card, register that card on your website before they can spend? You can easily assist them at the till if they have forgotten to do it or with a kiosk in your store, or an easy phone app, and with less than a minute of time, you have their contact details to market your little hearts out to. Offers, special customer days, the list is endless, but YOU need to work now to get them spending more than the value of their gift cards. How about allowing them to top up their cards themselves in store? Top up and save! What a great way to bring them back time and time again and use the gift card like a membership card, so it keeps them with you.

Having a gift card and doing the bare minimum with it, not offering a business manager to explore EVERY opportunity out there, or just selling it on your website is short sighted and the biggest missed opportunity for you and your stores. There are some amazing resellers and agencies out there, who also offer white label solutions so you can sell more easily, brilliant reward and benefit websites, and a ready-made marketing and sales team for you. Grab them by the necks and get them selling. Get on every consumer facing website you can with your logo. Make sure every search

engine sees your brand the most. Join the GCVA! You can meet most of the leading agencies there and it will open so many doors to more sales in your sleep than you can imagine. You will also rub shoulders with your competitors, and weirdly hear them sharing their best practices, so you gain insight there too. And if you confidently share your sales data, well that opens up a world of new opportunity for you to present to your boards and show them that they have missed a trick and you can prove it too.

Sleep well, Mr Brand. We are out there working for you whilst you do. Not against you.

Caroline Watson
Managing Director of Voucherline.com, TheGiftCardCentre.co.uk and Reward Panda.co.uk

Disclaimer: Please note all content included in the blogs the GCVA publish and share, are the personal views of the the individual bloggers/organisations. The GCVA cannot be held responsible for the content.

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