Bubble tea is my favorite drink. Today, I went to the Pearl Fever at the UBC Village and bought a Honey Green Milk Pearl Tea. When I was getting to pay as usual, I saw the gift card promotion at the store. It says, “Buy a gift card for $25 and get one free drink!”
Before I made the decision on whether to buy the gift card, I compared the benefits and costs that it would bring to me. I found a lot of benefits by purchasing the card. First of all, I am a regular customer at Pearl Fever and I feel it would be easier for me to make a purchase by using the gift card rather than other means of payments. I also like the card design because it is fashionable! Secondly, each Honey Green Milk Pearl Tea costs $4.14, and I usually buy at least one bubble tea per week, so I am sure that I would use up $25 by the end of the term! The card does not expire and thus I can use the card whenever I want. Last but not least, I can get one free drink immediately by getting the card! The cost is obvious! It’s the prepaid $25! Also, I need to make sure that I put the card in a safe place so that it is not lost or stolen!
Pearl Fever implements the gift card program for a reason. There are a quite a few advantages that the promotion brings to the store. Firstly, the marketing promotion helps the store increases its customer base. If I buy the gift cards and give them to my friends who have never been to Pearl Fever, they are very likely to buy the drinks from Pearl Fever with the cards and even become regular customers by recharging the gift cards after they fall in love with the bubble tea! My friends would see the value on the cards as “free money” or “found money”. This is the most basic psychological benefits behind gift cards. By taking advantage of consumer psychology, Pearl Fever would increase loyal customer base and hence would increase its average sale amount.
In addition, Pearl Fever’s gift cards give it a competitive advantage over other competitors. The gift card is like a walking billboard by being a walking advertisement. When the customers see their cards in their wallets, those cards remind them to shop at that store! Gift cards not only create a bond between the customer and the store but also enhance a business’s image by giving the company an image of “modernity”.
Are there any costs involved in implementing this gift card program? There are some disadvantages to consider! Gift cards can cost the Pearl Fever for 50 cents to $3 per card, depending on how many cards are ordered. There are also implementation costs that cover all start up fees related to producing and tracking of gift cards.
Since benefits outweigh costs for me, I finally decided to buy the gift card and get my favorite drink for free. On the retail side, card loyalty marketing programs can provide a powerful way for smaller companies like Pearl Fever to compete. These programs can be a powerful way to grow sales and retain customers. Smaller companies can take advantage of these benefits, but they must consider the costs before implementing them aggressively.
