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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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OCTOBER 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
Healthy, Wealthy, and Wise. It may be the last part of a saying dealing with going to bed early and getting up early. It is also the title of this month's advisory. We are going to look at five tests you can perform on your business along with several calculations you can perform on your business to determine how well the business is performing.
Small Business
Continually, I am baffled by small businesses that fail to ask for customers for their business. The example for October is service businesses that deal with their customers on a monthly, quarterly, semi-annual, or annual business.
I don't understand why they tell customers to call when they are ready for the next service.
It is just a tool. We are talking about money. The October article tells the story of several small businesses that make a big difference in their community. These are heart warming stories of making money and using that money in some unique ways.
How about an uplifting book to start the last quarter of the year? Big Magic: Creative Living Beyond Fear by Elizabeth Gilbert can give you that boost in both your personal life and in your business.
All this plus the Internet Tool for Your Business and a staff incentive idea for your business.
