Marketing: Gift card promo for salon

[rjonin]

Hello Beauty Pros,

I'd like your to get your input. Has anyone ever done a successful gift card promotion for their business?

I want to try a BoGo offer. Buy a card for $XX and get a card for $XX.  If you've done something similar, please share? What would you use as min/max thresholds?  

My avg spend p/client is around $106.  Also, 98% of my client base were referrals, but I still have room to fill in my schedule.

Thanks so much,

Alicia

[stylistlisa · Accepted solution]

At holiday time I've given some of my regular clients gift cards, free of charge, to give to someone they know. The person they give it to has no idea they didn't pay for it. It makes them look good (gift giving) and it gets a new client in my chair. I use them sparingly for my best clients and those most likely to give them out. Yes it can be a free service, or you can design it as an up-sell, maybe a free haircut with any color service. It's worked well for me in the past!

[stylistlisa · Accepted solution]

At holiday time I've given some of my regular clients gift cards, free of charge, to give to someone they know. The person they give it to has no idea they didn't pay for it. It makes them look good (gift giving) and it gets a new client in my chair. I use them sparingly for my best clients and those most likely to give them out. Yes it can be a free service, or you can design it as an up-sell, maybe a free haircut with any color service. It's worked well for me in the past!

[rjonin]

Hey Stylistlisa,

Thank you.  I offer complimentary Gcards to those in my membership community.  But, I love the idea of offering it as a surprise.

[SharonK]

I like this idea but I have a question. How does it work for your bookkeeping? You are paying taxes on your total at the end of the day for money that you never collected. How do you categorize the free gift card and how do you keep it separate in your totals? Thanks

[LinzyLuxeBeauty]

That is a great question! The way I’m looking at it, I don’t believe you would count it as a payment, where it would be considered “money not collected” .. Unless someone is physically buying the gift card then yes, it’s an actual payment. But couldn’t you offer gift cards that are rang up as “discount” cards towards a price? Or is that not a thing? Now I’m curious, since I was just about to do a gift card promo myself!

[Mzpink]

Can’t you write it off as promotions 

[stylistlisa]

Nope. You can't write off what you don't actually spend. It's the same as donating haircuts to charity, you don't actually spend any money. Whereas if you give actual money to charity, it's a valid deduction. 

[RMConsultingLLC]

You absolutely can write-off the value of donations and in-kind discounts/items (Promotional value, In-kind gifting, etc.). Money does not have to exchange hands value does and if tracked properly your CPA will help you categorize each based on their intended purpose.

Example: You gift a basket that includes a $300 worth or retail product and a $300 Service Certificate. This would be a donation of $600 and would require a 1099 to be provided to the recipient. 

Alternate Example using Trade Services: If you provide your hairstylist with $600 worth of facials in a single year and they provide you with $600 with of hair care in a single you would both count this as taxable income. Even though no money was exchanged value was exchanged.

These are traditional trade/bartering regulations.

Additionally, its important to remember if the value of any exchange is over $600 you would be required to provide the receiving party with a 1099.

[Doran · Accepted solution]

Every black Friday I offer a buy a $125 gift card for $100.  They do really well. I set up a code in my online and register for $25 off a $125 gift card so the client pays $100 but gets $125.  

[TOTSC]

Hi Doran.  Sounds like a great offer and glad it has worked out for you!!

[rjonin]

Hey Doran,

Okay, this is good.

The $100 threshold info is really helpful.  I was just like how much how much. 😬 

Do you set a limit on how many someone may purchase?

Thanks so much!

[Bronze_Palms]

That's a great idea! Are these physical gift cards? Or is it like an online certificate? I ask because, when booking an appointment, would you have to redeem it automatically at the appointment, or would the discount show up from the gift card in the appointment window? Thanks in advance for your help.

[RMConsultingLLC]

You can use either physical gift cards or eGift cards for this option. They both generate a 16 digit number that can be used as the card on file for booking appointments.

The discount is applied to the purchase of the gift card so they would redeem products and services at full value.

[Bronze_Palms]

From here, do you have to log it on someone's account or does it populate?

Thanks in advance for your help. Just unsure how to keep track of them!

[RMConsultingLLC]

If you attach a customer to the transaction it will save the gift card on their account as a card on file.

[HairGuyLancer]

I have, and it didn't work because I didn't do it correctly.