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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 and Gloria Friedman and Friedman Business Consulting for having created and introducing us to the idea for this calculator. PROFITS PLUS, FOUNDER OF...
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NOVEMBER 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
Seems like today, everyone is a consultant for something. Most small businesses owners have likely received an email, phone call, or visit from someone wanting to sell the services of a consultant.
You might find the right combination of consultants (let's call them advisors) in your own neighborhood. And they would likely trade their advice for some advice from you. This month's Small Business Advisory explains how.
Small Business
November has two special events tailored to small businesses. The first occurs in the third week of the month. It's the Great American Teach In Day. Your help will be needed and appreciated.
The second event is Saturday, November 28 - Small Business Saturday. Details of how to participate in each is in this month's newsletter.
Approaching the end of the year, many small businesses start to consider their pay scale for 2027. With some small businesses, bonuses at the end of the year are a tradition. The article of the month shares ideas of how to approach payroll as the new year approaches.
You are awesome at what you do. You are a small business owner and that takes a lot of bravery to do what you do.
Part of what you requires what Malcolm Gladwell calls, "thin slicing." Others refer to it as "gut feeling." The book of the month talks about the need to stop doubting your greatness.
All this plus the Internet Tool for Your Business and a staff incentive idea for your business.
