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Gifting your loved ones something of their choice can be the best thing you can do for them. But, for most customers, it is quite challenging to choose such gifts. The e-gift cards come to rescue the shoppers in such circumstances.

If we look at the research done by Businesswire, the Global Gift Card Market is estimated to be $845.39 billion in 2022 and is forecasted to reach $2021.64 billion by the end of 2027, growing at a CAGR of 19.05%. So you can see the Global Gift Card Market will continue to grow in the future.

Suppose you have an online store on any popular eCommerce platform such as Magento 2, you should definitely try Magento Extension to Boost sales in Holiday Season.

In this short post, I will discuss everything from the nuts & bolts of e-gift cards to their benefits for your business. 

What is An e-Gift Card & How Does it Work?

An e-gift card, also known as a digital or virtual gift card, is a predefined value-containing card that can be used to make a purchase in a brick-and-mortar store or an online store.

The process from purchasing to redeeming e-gift cards should be effortless to give your customers the best user experience.

The process goes like this:

• The first thing you should do is create various e-gift cards that customers can choose from. Manage them in a proper way so customers can explore and filter gift cards as per requirements. You should use a gift card extension to manage your gift cards easily. 
• After choosing the gift card, provide your customers with an easy, convenient, and fast method to pay for a Gift Card.
• When customers successfully complete the payment process, a unique gift code should be generated that carries the value of the gift card as per the customer’s selected plan.
• After the unique gift code is generated, you should provide a convenient way to send that code to customers’ loved ones. An easy and secure way to send code is via email and SMS.
• Now finally when an e-gift card is received by your loved ones, you should provide convenient methods to redeem that gift card at an online or physical store.

You should also set user-friendly terms and conditions for the usage of e-gift cards. Like, if recipients have not used all the balance of the gift card in single use, they can use the same card for a second time to purchase any product. This will make recipients return to your store and make their purchase more than the remaining gift card balance.

Purpose of e-Gift Cards in Ecommerce Business

If you want to level up your eCommerce business, visibility and customer loyalty can play a vital role in that, and e-gift cards can provide you with both. An e-gift card holder will surely visit your online store at least once, and grant you the opportunity to make your store more visible. The recipient will come to visit your store and explore your products till he/she gets all the benefits of the e-gift card.

Whatsmore, you can offer some more benefits over these e-gift cards and earn your customer’s trust and make them loyal to your brand.

Benefits of Offering e-Gift Cards in eCommerce

Facilitating your customers with e-gift cards can benefit your business in more than one way, such as:

Grow Sales and Revenue

The most crucial benefit of digital gift cards is that they can increase sales on your online store. People often find it challenging to choose the right gift for their family and friends. Moreover, when time is running out, and last-minute gift purchasing is needed, e-gift cards can save the day!

E-Gift cards can also direct more revenue to your online store. Recipients will probably spend more than the predefined amount of e-gift cards while buying any product. People often use e-gift cards as discount money while purchasing a product with a larger value to prevent paying more significant amounts.

Increase Brand Awareness

Another benefit of the e-gift card is increasing your brand awareness. It might be possible that the recipient has never heard of your brand before. In that case, an e-gift card will make that recipient come and explore your store. There is a high chance that the e-gift card recipient will also consider your brand for future purchases.

You can put your brand’s logo on an e-gift card to make it noticeable. Whatsmore, e-gift cards are not bound to any physical form so they can be sent and shared globally. In other words, it can increase your brand awareness globally.

Get New Customers

When customers purchase e-gift cards and send them to their family members and friends, the e-gift card holders are bound to visit your store at least one time. That gives you a fair chance to make a first impression of your online store. Valuable products with the best offers may catch recipients’ attention, and you will get new customers. This also reduces the customer acquisition cost!

Assured Profit of Unused Cards

Many recipients forget about their e-gift cards, and the cards expire without spending a penny. Whatever the reason, the entire amount the e-gift card holds becomes profit for your business. As per the Creditcards, 52% of Millennials, 51% of Generation Z, 43% of Generation X, and 42% of Boomers of the total US adult population are unlikely to have this kind of unused gift card hanging around with them, and eating dust. The total amount of unused cash is roughly $21 billion.

Right Time to Sell e-Gift Cards

The right time to sell e-gift cards will depend on the customers. People are always looking for e-gift cards with the best offers on various occasions, such as birthdays, promotions, anniversaries, and special days like mother’s day & father’s day.

However, e-gift cards have become more demanding at festivals like Christmas and Halloween. You can see a massive jump in e-gift card searches in December for the past several years on Google Trends. Hence, it can significantly boost your business’s sales and revenue if you sell e-gift cards with the best offers in these months.

Wrapping Up

E-gift cards are the perfect and practical gifts you can offer for loved ones! E-gift cards can be a lifesaver when people can’t decide what gift to give to their special one. It can also save a day of last-minute shoppers. Nowadays, almost all brands are providing a range of e-gift cards with various predefined amounts. Offering e-gift cards in your store will surely improve customer experience and grow your business. I hope the above-mentioned benefits are good enough for you to get an e-gift card plugin for your online store.

The post What is an e-Gift Card & How Does it Work? appeared first on noupe.

The pandemic has accelerated a massive shift towards online shopping. More consumers are preferring online shopping over traditional ones, and most of the brick and mortar stores have started declining.

Even after the pandemic, the use of digital channels has increased significantly. This urged customers to purchase online from small household items to daily essentials.

Since the last few years, eCommerce has been one of the widely used platforms by most professional companies and has gained tremendous popularity. It provides an outstanding opportunity for businesses to grow and sell their products worldwide.

Customer experience plays an evident role and is at the center of the growth of any eCommerce business. To ensure utmost customer satisfaction, most eCommerce businesses opt for providing the most preferred and convenient payment method. The store owners collect payments from their customers through credit cards, debit cards, or digital wallets.

Till now, Credit cards have been highly preferred for making payments. But, in recent years, Buy Now, Pay Later options have gained significant popularity globally. Out of multiple payment options in the market, utilizing the best payment method is the prime concern. Buy Now, Pay Later is more prevalent amongst the young generation, especially while shopping online. Most companies have started to offer Buy Now, Pay Later options. 

The future of BNPL seems to be shining amongst the youth as by offering such a payment facility, they can easily purchase the item of their choice. Moreover, it is nothing but a type of loan that the customers have to repay within a specified time frame. 

Here, the store owners need to be careful while purchasing as everyone is not capable of making a repayment. BNPL has proved beneficial for those who want to make large purchases or have too pricey products. 

By adopting such a flexible payment option, layaway has proved to be highly advantageous for store owners that have helped to reach new customers, increase conversions, and best serve existing ones. 

According to a survey, nearly 55.8% of consumers have opted to use the Buy Now, Pay Later service, which is an almost 50% increase in less than one year compared to 2020. So, what are you waiting for to start providing your customers with Buy Now, Pay Later service to your customers? 

Incorporate Buy Now, Pay Later functionality in your eCommerce store easily to fascinate a great pool of customers and leverage sales. So, if you are using Magento for your online store, you can easily assist your customers with Buy Now, Pay Later functionality using the Partial Payment extension for Magento 2 and provide them with the best payment experience. 

What is ‘Buy Now, Pay Later?

‘Buy Now, Pay Later’ can be defined as the short-term financing option that attracts customers to purchase and make payments in the future without any interest. Here, the customers can pay in installments instead of paying the entire amount at that time frame. 

Companies such as Klarna and Affirm even provide Buy now, pay later payment options for the purchase made from the merchants involved. As such, PayPal has also launched its installment loan program. Such financing options are even provided by other top companies like Chase, American Express, and much more. 

The repayment needs to be done within the mentioned time period. The customers are allowed to pay either in equated monthly installments (EMI) or as a lump sum amount. The store owner can charge interest from the customers if they fail to make repayments within the mentioned time frame. 

How ‘Buy Now, Pay Later’ Works?

‘Buy Now, Pay Later’ payment option is available primarily for the young generation, millennials, or those who do not have credit cards. At present, almost all eCommerce companies and banks have started to offer BNPL options. Banks such as HDFC, ICICI, and other eCommerce platforms like Amazon and Flipkart provide split payment options. 

This helps attract potential customers to make a purchase. Such payment options have proved useful where the customers need to pay a certain amount in advance, the customers do not have a significant amount in cash, or the product is too costly. 

BNPL facilitates customers to make purchases online and then pay over some time in weekly, monthly, or yearly installments. Usually, the interest rates of BNPL are comparatively high, but if they are paid within that specified time frame, you can avail it for free. 

For instance, if you make a purchase worth $1000, you might be provided with a BNPL option. Here, you can pay in four equal monthly installments of $250 each without paying any interest. If you miss out on paying installments within the determined time, you will have to pay extra charges for the same. 

Terms and conditions offered by various service providers may vary accordingly, which are as follows: 

• Avail BNPL option from the merchant providing such payment facility.
• You might need to make a down payment of around one-fourth part of the total amount purchased. 
• Make the repayments in equal interest-free monthly installments.
• Quickly make payments via debit card, credit card, or bank account. 

‘Buy Now, Pay Later’ has proved to be compelling enough while making purchases online and has gained massive popularity in recent years with the rising trend of the eCommerce market. 

How does BNPL differ from Credit Card Payments?

In most cases, BNPL and credit cards are similar in that they both provide deferred repayment options to the customers. However, specific critical differences are observed amongst these two products that are easily accessible. Using a credit card requires a good credit history and verification, whereas BNPL provides hassle-free access. 

It is even possible to shop online and quickly opt for the BNPL option to make a payment. BNPL offers easy access, convenience and differs from many other aspects. Generally, credit cards offer free credit periods for upto 45 days, whereas BNPL offers to provide equal monthly installments that may vary from 15 days to one month. 

Any business can easily use credit cards, and BNPL can be used via partner merchants. There are joining fees associated with the credit cards, whereas BNPL does not charge any joining fees or extra charges. Using credit cards, you can earn discounts, offers, and air tickets. However, there are no chances to gain rewards using the BNPL payment option. 

Top BNPL Companies

BNPL has been serving the market for many years. But, a sudden upsurge in demand has been observed in the market due to the pandemic. According to the survey by Statista, it has been noted that one out of the three UK customers used the BNPL option to make payments. Moreover, the younger generation preferred using the BNPL facility compared to the older generation. 

Some of the top players in the market are as follows: 

• Afterpay
• Klarna
• Zip
• Openpay
• Payright
• Splitit
• Latitudepay
• LayBuy 

Reasons Why Customers Prefer BNPL

With the eCommerce market continuously evolving, there comes a significant change in the payment facility such as “pay at the time of checkout” to provide customers with flexible payment options. Youths entering the market have brought a complete revolution in their shopping habits, from purchasing online to making payments. Provided here is a list of the top reasons for choosing BNPL as the most preferred payment option: 

Feasible Rates

Compared to traditional credit cards, BNPL provides the most flexible payment option without charging any interest. Generally, BNPL does not carry any joining fees associated with it, whereas specific bank lenders may charge a small processing fee.

Moving Away from Traditional Credit Cards

BNPL has been the most flexible and preferred payment option amongst the young generation. A tremendous shift towards BNPL payment options has been observed while making larger purchases or too pricey products. High costs are associated with traditional credit cards, such as joining fees and interest charges. 

Convenient & Flexible

BNPL offers flexibility and convenience to the customers by allowing them to make payments over a later period. Offering such flexibility encourages customers to make large purchases or easily purchase pricey products, and this will also help customers engage with the stores. 

How is BNPL Beneficial to eCommerce Store?

BNPL has proved beneficial to my eCommerce store in many ways, such as boosting conversions, increasing sales, attracting potential visitors, and quickly focusing on the existing ones. 

Increased Sales

As per the survey, the site providing the BNPL option has a 6% chance of conversion compared to others that do not provide such a payment facility. There are chances that customers might not make a purchase because of the unavailability of the payment method. 

Customers might think of purchasing if they are comfortable enough with the available payment option. As a result, this will help to boost sales and increase conversions. 

Facilitates to stand out in the Competition

Presently, BNPL has gained widespread popularity amongst most of the eCommerce stores. It is advisable to offer the best payment option to your customers to stand ahead of the competition. There are high chances that you may miss out on potential customers if you are not providing a BNPL facility. Adversely, it will highly impact your competitors if they are not providing the service.

Reduced Cart Abandonment

Offering pocket-friendly options encourages visitors to purchase without thinking about the cost associated with the product. Having an installment facility, the customers feel relaxed thinking about the product cost. This will motivate customers to purchase an item, and as a result, the chances of cart abandonment will likely reduce. 

Advantages of Buy Now, Pay Later

• Convenient and flexible payment options.
• Low or zero interest rates as compared to credit cards.
• Easy approval.
• No joining fees.
• Transparent and straightforward process. 
• Safe and secure transaction. 
• Not essential to have a credit history. 

Disadvantages of Buy Now, Pay Later 

• Tracking payments is a challenging task.
• Delay in payments may result in late fees.
• No chances to gain rewards.
• Even if the item is returned, you still have to make payments. 
• Credit limits are comparatively small. 

Conclusion

Buy Now, Pay Later seems attractive enough if the customers don’t want to make a complete payment altogether. It facilitates customers by providing a little extra time for making payments. 

Implementing Buy Now, Pay Later in your eCommerce store has proved highly beneficial. Providing such a payment facility shows that you care about your customer’s needs and, as a result, will help to grow your sales and can easily attract huge customers. 
Hence, think of incorporating Buy Now, Pay Later into your online shopping platform that will help to allure a pool of huge customers and will help improve sales. This will help provide an in-class shopping experience to the customers with flexible payment options. As a result, it facilitates creating a win-win situation for both customers and store owners.

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