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Gift Card vs Discount Calculator from Profits Plus Many businesses offer discounts on their products and services. In 2018, non-grocery retailers missed out on $300 billion in revenues - 12% of total sales - due to markdowns, according to research from retail think tank Coresight and inventory optimization firm Celect. In the survey of more than 200 "senior retail decision makes", those responding pinned the blame for more than half (53%) of unplanned markdowns or "inventory misjudgments". Look at the bottom line of your business; can you afford a 12% loss? Being a business that discounts your products or services erodes your margins and sets the customer up to expect that your initial price is not the actual price they will pay. What we have just described creates a customer who is now taught to look to your business only when you are offering a special price. This process does nothing to invite a customer to do business with you again. A gift card in place of a discount works differently. Price integrity is maintained; customers return more frequently; profits increase. As this concept was tested, we found several things; the size of the average ticket becomes larger when offering this to the initial customer, and the average ticket becomes even larger with the customer who returns to use the gift card. You should first determine the size of your average ticket. If your average sale is $40, then the gift card should be given for a higher dollar amount; perhaps $55 or $60. This is to incentivize the customer to spend more, at full margin, than they normally spend. One of the businesses using this calculator found 82% of the gift cards were redeemed! Use this calculator to see how the usage of a gift card will protect your margins, increase your sales, improve the average line count, and size of the average sale. The yellow squares are where you insert the information about your business. The numbers you see in the yellow cells currently are there only as examples of how the calculator works. We want to recognize Ron Friedman and Friedman Business Consulting for having created and introducing us to the idea for this calculator. In addition to being a wise business person and friend, Ron Friedman and Friedman Business Consulting can create a unique gift card for your business.PROFITS PLUS, FOUNDER OF...
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MARCH 2026
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With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.
Small Business
Every time I see the logo for Target stores, I think about small businesses and the need to know which people to target as their customers. Of course, of most importance is the person who has spent any money with your business.
I ask businesses if they know how much the average person spends with their business. Most offer a quick response with a dollar amount. That answer is incorrect as they are telling me what the average existing customer is spending. The average person in any community spends no money with that small business.
Looking for new customers without any plan of how to do so is just spending money. That is why every small business needs to know how to find and use information. Find ideas in the March Small Business Advisory.
Small Business
Employee retention; is it important? Or is it easier to lose an employee and wait for the next applicant to walk in the door? The Small Business News for March shares some statistics of the expense you incur when you make the change instead of working to retain a current employee.
It is baseball season and we use the sport as an explanation of the cost of growing your business. In Boston's Fenway Park, left field has a wall that is know as the green monster.
And that is what growing your business is - a monster! You can't successfully grow your business without a plan and knowing you will have the cash on hand to pay for the growth.
Are you selling something or persuading the customer? With your employees are you repeatedly telling that employee or are you persuading them to excel?
Influence: The Psychology of Persuasion by Robert Ciaidini is our suggested book for March 2026. Most definitely an appropriate read.
All this plus the Internet Tool for Your Business and a staff incentive idea for your business.
