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This is the first in a series of articles in the form of tips for hair salons.

A gift card is very much the same as a gift voucher. Someone comes to your hair salon business and purchases a gift card from you to be used by someone else at another point in time. In my work with hair salons the greater majority of hair salons have not seen the exceptional benefits of selling branded gift cards in their salon.

The advantages to hair salon gift card sales are as follows

1. Cash flow: You receive money now to spend on stock, expenses and anything else without having to have physically sold something to the client. This is very important and useful.
2. Indication of great service: A person buying a gift card from your salon is a sign of confidence and satisfaction in the service your hair salon offers that client.
3. Use it for Rewards: Almost all hair salons have some kind of loyalty or rewards program in place to thank clients for being loyal. I have seen however that many clients don’t like being forced into using a reward the next time they are in the salon. Those business rules are to rigid, rather be flexible and load the reward value onto a gift card, this gives your client the benefit of being able to use up their reward whenever they want and better yet they may lend the card to a friend to use up the reward which is an opportunity to get another loyal client in your store.
4. Never give cash credits: Never take cash out your till drawer again if a client returns goods, simply load the value on a gift card and the client is forced to make use of that credit in your store again. This amounts to savings in cash flow.
5. Gains new clients: most times a gift card will be given to someone that hasn’t used your hair salons services before, this is an opportunity to gain a loyal client for years to come.
6. Clients spend more than their balance: Its a well known fact that most people tend to spend more than the balance on a gift card, in other words the card is simply the enabler to getting the client to spend more than they would otherwise have.
7. Marketing tool: Besides the card going out to new clients you would not have had before. An excellent tip is for you to go out and give gift cards away to people. i.e load R 50-R 100 per card and then give the cards away and state that the epople can use the value to redeem services. Find creative manners to market your business through the card. Give cards loaded with money to businesses that you beleive will represent your brand well etc.
8. It looks and works like a credit card: The beauty of gift cards is that the good ones, look just like credit cards, same size, magnetic strip on the back and encoded the same as a credit card. This has meaning to clients, much more meaning then a piece of paper like old paper based gift vouchers were. Its a sign of professionalism and success as a company. Take advantage of that.

There are however disadvantages to hair salon gift cards and they are as follows:

1. Costs: Proper gift cards don’t come cheap. As with all graphical type work it is based on quantities and number of colours. Cards can range from R 15 for a 500 cards to R 5 for 10 000 cards. These costs need to be paid upfront as well and cannot be spread over a period of time.
2. Extra administrative work for staff: It can become more difficult for your staff to manage gift cards especially if there are many given to clients. Cashup’s are more difficult because a gift card only effects cash up on the day the card is purchased not on the day it is spent.

In all honesty however the advantages far out way the disadvantages. My start hair salon client Palladium Hair Company in Waterkloof, Pretoria makes use of gift cards and without a doubt this has contributed very significantly to the overall service she offers her clients and number of new clients entering the store. To further add to this she has multiple branches and her clients can use a gift card purchased in her Pretoria branch at her Cape Town branch as well when they go for holidays etc.

The manners in which you can get a gift card system

There are only two ways I know of.

1. There are companies in South Africa that offer gift card solutions, they give you an all in one solution, they bring you a new gift card machine that looks just like your credit card machine, they have the cards developed etc. This is what all the major retailers make use of such as Woolworthes, Pick n Pay etc. The costs are about R 1500 per month for machine rental, they will get the cards at an attractive price and then you must pay transaction fees on each transaction as well as pay a possible percentage fee similar to that on credit card based transactions.
2. Get Gift Cards integrated into your Hair salon point of sale software. Our companies hair salon software, Chrome Hair provides such a a facility. We can source the cards for you, unfortunately they will cost a little more per card. You don’t have to worry about monthly fees, transaction charges and percentages either. You in additional have the added benefit of making use of the card for:
   1. Use the card a Most valued client card, ie every client that walks in your door gets a card for life
   2. Load rewards on the card
   3. Use the card for credit notes
   4. Use the card in all your branches

Conclusion

To end, don’t ever underestimate the power a single gift card can have, the impact will be massive, you simply have to ensure your hair salon offers a fantastic service to all its clients.

As always I welcome any commentary on this topic and hope that this article and those to follow can positively have an impact on your hair salons business.