Tag Archives: retail

Gift cards – why you should offer them!

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A gift card is a convenient way for a customer to provide a gift to a friend, family member or business associate. They are most commonly used for gifts when you don’t know what to buy someone. Interestingly a survey done in 2017 by finder.com.au found that one in seven gift cards purchased in Australia went unused. This guide will look at why you should offer them, what are the rules you must abide by and how you go about offering them.

A gift card, gift certificate or gift voucher is a prepaid stored-value money card or certificate, usually issued by a retail store or bank, to be used as an alternative to cash for purchases within a store or related businesses.

WHY should I offer gift cards?

Gift cards offer several advantages for small businesses; the cost to provide them is minimal compared to their potential return. Consumers generally feel a gift card is an opportunity to spoil themselves.

Small Business Advantages include:
  • Give customers an incentive to spend money at your business and create repeat purchases.
  • Revenue is generated in advance sales as no goods or services are redeemed yet.
  • Having customers carry a gift card around with your logo builds your brand.
  • In most cases, customers will spend more than the gift card amount.
  • Gift cards provide you with a promotional opportunity. Spend $100 and get a $10 gift card.
  • Customers may never actually spend the value of the card, whether it be the last few dollars on a card or the whole amount.

WHAT are the Rules around gift cards or vouchers?

As of November 2019, the rules changed around gift cards. The rules now state that a gift card must have a minimum expiry date of 3 years from the date the card is sold. That expiry date must be listed on the card and no post-purchase fees can be added. A post-purchase fee would include activation, account keeping or balance enquiry fees. Penalties for non-compliance are $6,000 for an individual and $30,000 for a business.

When you sell a gift card/voucher, the customer has an asset of your business until the voucher is used. Thus, from an accounting perspective, when you record the sale of a gift voucher, it needs to be recorded as a liability posted to an Unclaimed Gift Certificate account. When the customer redeems the voucher, all you need to do is create an invoice and pay for it using the funds from the Unclaimed Gift Voucher account. This way, you can easily track the value of outstanding gift vouchers or write off any that remain unredeemed after the expiry date.

From a GST perspective, a gift card has a monetary value but does not need to be included in your GST activity statement until it is redeemed for products or services. The exception to this is when a gift card is not for money but rather a tangible product or service, then GST must be paid and reported on the voucher sale. For example, 10 hours of technical services.

 If the voucher expires before it’s redeemed, you’ll need to report the unredeemed amount as income and 1/11th (being the GST component) is reported and paid to the ATO.

HOW do I offer gift cards?

The three most common forms of gift vouchers/cards are:
  1. A credit card-sized plastic card electronically loaded with a specific money amount. Note that some cards can have additional funds added or topped up later.
  2. A gift certificate is some form of a paper promise from a business allowing you to redeem the specified amount back from the store.
  3. eGift cards or vouchers. This is normally a set of codes and sometimes a barcode that you can receive via email. These codes/barcodes can then be applied at the checkout for credit.
As a small business, you should consider the following:
  • Which type of cards you will offer as above?
  • How do you tell customers they are available? Signs, internet, etc
  • Will you restrict to set values or variables? Such as $50, $100 and $200?
  • Will the expiry be 3 years or more?
  • Can it be redeemed in your online store if you have one?
  • If you have multiple stores using the same brand, is the gift voucher transferable?
  • Integrating your POS and Accounting systems allows you to process and track these vouchers simply. (most have this functionality)
  • Are there any special terms? Such as not allowing gift cards to be used to buy gift cards or transferable for cash.

Some plastic card solutions make it simple to activate and redeem cards by simply swiping the card through your EFTPOS reader. Other solutions will require some other type of solution, like keying in a number. Be wary of a manual system that can be lost or stolen.

You can brand your gift cards by having a custom gift card printed by various companies for less than $1 each. However, note some POS software solutions require you to use their gift cards which may cost more.

HINTS

If you sell gift cards, make sure to showcase them in a highly visible place that customers must walk by. For example, placing gift cards next to the sales desk will lead to more impulse buys from customers.

SUMMARY – gift card solutions

Offering gift cards allow customers a convenient way to provide gifts to others. A small business benefits from having the money upfront and encouraging repeat visits to the store. Tracking and accounting is key to managing them with POS and accounting package companies offering solutions.

Product displays in retail stores

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  • An imaginative retail display is a cost-effective way to enhance customers’ purchase behaviour, increase product sales and return on investment. 
  • Imaginative displays work as they increase customer arousal and infer product benefits, which influence their purchase behaviour. The displays need to be consistent with the product nature to have a positive impact.
  • The study, in the prestigious and influential Journal of Marketing, involved researchers from Monash University, Queensland University of Technology and Capital University of Economics and Business (China)

Have you stood back to admire the creative, ‘gimmicky’ and attractive product displays in retail stores? A new international study has found that these displays subtly awaken customer senses and increase purchase behaviour.

Researchers from Monash University, Queensland University of Technology and Capital University of Economics and Business (China) found that for a wide range of consumer products – from bathroom tissues and toothpaste to soft drinks and confectionery – creative product displays positively influence customer behaviour.

Imaginative displays are constructed using multiple units of the same product in a novel and aesthetically appealing form. They can be found in supermarkets or retail stores to entice customers to purchase a certain product. 

This new research paper, published in the prestigious Journal of Marketing – published by the American Marketing Association – examined the effect of imaginative product displays on customers’ purchase behaviour with more than 1,500 participants from Australia, the United Kingdom and the United States. 

Professor Hean Tat Keh (Monash Business School), Dr Di Wang (Queensland University of Technology) and Dr Li Yan (Capital University of Economics and Business) identified that these imaginative product displays triggered affect-based arousal and cognition-based inferred benefits in customers. 

This means the imaginative display arouses customers’ interest, along with inference of product benefits which increase their purchase intention for the product on display. 

As part of the broader research project, results from six studies showed that, relative to basic and standard product displays, imaginative displays in retail stores can increase customers’ purchase intention, actual purchases, product sales, and return on investment. 

“However, these displays cannot just be creative for the sake of being creative. They need to be relevant to the product and capture the imagination of shoppers,” Professor Keh said.

“Besides arousal, our research revealed a cognition-based process whereby imaginative themed displays, with particular shapes mimicking actual objects such as a bear and a battle tank, conveyed embodied meanings, such as strength and energy, that transfer to the products constituting the display, which increase customers’ purchase intention.” 

Key findings from the research include:

  • A 53 per cent increase in return on investment from the sale of tissue boxes between the imaginative and standard promotional displays in a grocery store.
  • Customers exposed to the imaginative product display were 48 per cent more likely to purchase chocolates than those who saw a standard display at a confectionary store. 
  • Shoppers were more likely to buy more toothpaste if the display was creative and attractive than a standard display. 
  • Energy drinks in a display shaped like a tank increased customers’ purchase intention due to the positive effects of arousal and inferred product benefits.

“Our findings not only explain why some retailers use ‘gimmicky’ imaginative displays but also provide evidence on the processes and boundary conditions of these displays to favourably influence customers’ purchase behaviour and increase sales at relatively low costs,” Professor Keh said.

Professor Hean Tat Keh (Monash Business School), Dr Di Wang (Queensland University of Technology) and Dr Li Yan (Capital University of Economics and Business) produced the study titled ‘Gimmicky or Effective? The Effects of Imaginative Displays on Customer Purchase Behaviour’, forthcoming in the Journal of Marketing. (Both Dr Di Wang and Dr Li Yan obtained their PhDs from the Monash Business School.)

Please visit https://doi.org/10.1177/0022242921997359 for more information. 

For more ideas see Small Business Answers guide to marketing.

POS system or terminal

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In the old days we had a cash register which is a cross between a calculator and a cash box.  These days we have a POS System to transact a sale or order and take cash or credit card payment. In this guide, we will look at why you might need a POS terminal, what you kneed to know and how to buy the right one for your retail environment, cafe or restaurant.

A Point of Sales system (terminal or machine) is an electronic device that allows a physical transaction to occur between a merchant and a customer for a product or service. This is much more than an EFTPOS terminal which we have covered in a separate guide. Put more simply it’s the device they use at McDonald’s to enter your order and take your money.

WHY do I need a POS System or Terminal?

A POS system will automate your process of completeing a transaction rather than writing on paper, using a calculator or simple cash register.

Retail POS software brings many benefits to retailers aside from simply completing transactions. These include:

  • Sales reporting and analytics: Provides retailers with insight into their sales, helping users make informed decisions that strengthen the business.
  • Inventory management: Automates stock control and helps retailers determine optimal product counts and when and how to reorder top-selling products.
  • Customer management capabilities: Help retailers automatically record and track valuable customer information, enabling stronger relationships, and encouraging repeat business.

WHAT do I need to know about POS systems?

 They come in various flavours and can be from simple to very complex.  You could have a solution as a stallholder, a restaurant, or a retail store.  In a retail store with such a system you could scan a bar code to have the item automatically added to a sale, take payment, adjust instore inventory, and pass sale information through to your accounting system. Additionally, in a restaurant you could take an order via a smartphone, add a table number and have the order print out in the kitchen.

Many POS solutions today will help you run and grow your entire business, with information such as detailed sales reports and analytics, employee management and tracking software, inventory management, and gift cards.

HOW to choose the right POS system?

As a small business, it will make much more sense to try to find an off the shelf system rather than going for a custom solution that will have large upfront costs.  The benefit of using a POS system is that it can simplify and automate many of your administration tasks freeing your time up to spend growing your business rather than maintaining it. These cloud solutions will also integrate with your accounting package (see our essential guide on accounting packages and cloud solutions) prepopulating all the data so no manual input is required.

Even though this solution is cloud-based it will still require some hardware at the point of sale like a smartphone, tablet, PC, or dedicated terminal which you will interact with. A cloud-based solution is one where the computing and software sit external to your business and for a monthly fee, you get the functionality without having to invest and maintain expensive backend computing hardware and dedicated software.

When choosing a POS system you should consider
  1. Stand-alone system or Cloud-based?
  2. Does the package suit Australian conditions, for example GST?
  3. Will it work offline?  You need it to still function if the internet goes down.
  4. Does the provider have appropriate security in place to stop others from accessing your data?
  5. Does the solution come with hardware or do I need to buy separate hardware like a tablet?
  6. Cost – how much per month per terminal/store?
  7. Usability – Can it easily be used day to day with minimal training?
  8. Fast & efficient –  How quickly can the operator complete a transaction? Nothing worse than keeping a customer waiting
  9. Will it meet your future needs?  Can you easily add extra terminals?
  10. Does it support value add functionality that might assist your business? For example, inventory tracking
  11. Will it integrate into your existing or planned accounting package?
  12. Does it support EFTPOS or can EFTPOS be integrated?
  13. What reporting is available and how easy is it to interrogate and interpret?
  14. Is customer support available and during what hours?

Some of the companies providing cloud POS solutions in Australia today include Hike Up, Kounta, Retail Express, Square, and Vend.

HINT

Now that you have selected a POS system you also need to consider what additional physical hardware you might need beyond the terminal, tablet or smartphone, such as a cash draw, printer, EFTPOS terminal, bar code scanner, tablet mounting bracket, or contactless credit card reader.

SUMMARY – Off the shelf POS solution

A bit of time invested in this solution will pay dividends in years to come, streamlining your business and freeing up manpower to work on other parts of your business. An off the shelf solution will meet the needs of most small businesses.

Office supplies made easy

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Visiting an office supplies store is a bit like visiting Bunnings. You go in for a pen and you walk out with a pen, a new printer, and a chair mat. What you may not know is these stores can help small businesses with so many other services. This guide will show you these stores can be a one-stop-shop for many of your small business needs.

Office supplies are consumables and equipment regularly used in offices by businesses and other organisations, by individuals engaged in written communications, recordkeeping or bookkeeping, janitorial and cleaning, and for storage of supplies or data.

Wikipedia

WHY should I use an office supplies store?

Having the ability to buy a lot of the items you will need to set up or run your small business is an advantage as it will reduce the running around and ad-hoc nature of procuring items.  You will also find the major chains are competitive and offer some type of price matching or beating offer.

Opening a business account with one of these stores could offer the following additional advantages:
  • faster checkout – as your details are already in the system
  • view order history – easy to find something you liked before
  • manage shopping lists – reorder your most used items easily
  • credit account – a single invoice to pay with credit terms every x number of days

Considering an office supply company for some of your services may also reduce the number of vendors you need to deal with.

WHAT can I buy at an office supplies store?

You may be surprised by the breadth of products and services that can actually be available:

Staples
  • Stationary – pens, paper, scissors
  • Office Furniture – chairs desks storage cabinets
  • Bulk and specialised printing – business cards, brochures, posters, signs
  • Office supplies – diaries, financial books, laminators, paper, ink & toner
  • Cleaning supplies – toilet paper, detergent,
  • Kitchen supplies – coffee, bottled water, tissues
  • Office technology – Laptops, printers, monitors, Hard drives, software
  • Telecommunications – Smartphones, phone plans, cordless phones
  • Workplace safety – safety glasses, workwear, ear protection, signs
  • Office security – video surveillance, locks, safes
  • Moving supplies – boxes, tape, trolleys
Services
  • Technical support – help get your IT problems fixed
  • Business IT solutions – consulting on what you need
  • Software licensing – packaging software to suit the number of users
  • Safety solutions – consulting on your needs
  • Managed print services – See our guide on printing
  • Promotional products – giveaways with your logo printed on them
  • Parcel delivery – freight services you can use
  • Office fit-out solutions – consulting on office fit-outs
  • Furniture assembly – building flat-pack
  • Business financing – small business loans
  • Product Insurance – cover for devices like smartphones, Laptop, etc
  • Graphic design – logo design and layout services
  • Alcohol deliveries –  ready for Friday drinks
  • Milk and fruit delivery – perishables delivered to your door

HOW do I get office supplies?

Most organisations will allow you to

  1. Shop in-store
  2. Online orders
  3. Phone orders

For your online or phone orders you can click and collect or have the items delivered.

Delivery may even be the same day if you order before a certain time and some even offer free delivery when you spend over a price threshold.

Online orders also offer tracking so you can get a good indication if the item you desperately need is on its way.

If you require the services on offer such as one of the consulting services you will need to go instore to discuss or enquire online.

HINTS

Have some controls on how much can be spent and by whom otherwise you may find office supplies cost a bit more than expected.

A shared stationary cabinet stops each desk containing boxes of spare biros.

SUMMARY – One-stop small business shop

An office supplies store is so much more than a place to get a pen or some paper and can indeed become a trusted business advisor.  If nothing else it is a store that you can conveniently get most items needed to run a small business office.