Two years on from the onset of pandemic restrictions, a business leader is highlighting the power of local gift cards to drive retail and hospitality recovery in Scotland

Payments provider Miconex says that independent retail and hospitality businesses were the most popular places for consumers to spend their local gift cards in 2021.

“Looking at the data for the 2021 top 10 Town & City Gift Card programmes, we can see that overall, 72% of redemptions were for retailers with 19% for food and drink based businesses,” said Colin Munro, managing director of Miconex.  “Local gift cards have the power to support retail and hospitality recovery, and many other sectors too.

“Independent businesses made up 83% of registered merchants in 2021 across the top 10 programmes. Two years on from the start of the pandemic and small, independent businesses need our support more than ever. ONS data shows that there were 6.5% fewer private sector businesses in January 2021, the largest fall in 20 years.

“One in seven UK businesses are at risk of failure by April 2022. Research from Simply Business found that four in five small business owners say the pandemic has negatively impacted their mental health. Town & City Gift Cards give places the opportunity to support independent businesses in the industries that need it most.”

Aberdeen, East Ayrshire, Perth, East Lothian and Kirkwall were amongst the top 10 Town & City Gift Card programmes in 2021, collectively recording sales of over £1.2 million for their local gift cards, a 32% increase on 2020. In addition to retail and hospitality, Town & City Gift Cards can be spent with leisure and attractions, health and beauty and services.

Retail and hospitality have been particularly impacted by the pandemic. UK Hospitality estimates that the hospitality sector lost over £80 billion in sales between April 2021 and March 2021, equating to £220 million each day. Meanwhile, the BRC estimates that the three lockdowns cost non-essential retail an estimated £22billion in lost sales.

Over half of redemptions of the East Lothian Gift Card were at retail in 2021

East Lothian had 66% of gift card redemptions in 2021 at retail, 23% at hospitality and 5% at leisure and attractions. Strawberry Corner Garden Centre is one of the most popular places to redeem the East Lothian Gift Card with over £3000 of redemptions in 2021 alone. Neil Duffield is a Director at Strawberry Corner:

“When I heard about the East Lothian Gift Card, I was happy to join it. It’s a local gift card and the benefit to our business is that there is no commission for us to accept the gift card. It costs us nothing so it was a no-brainer to take part. People pay with the East Lothian Card and it works like a debit card and the money is in our bank like any other card payment. Our credit card payments are linked to our EPOS, so it was simple enough to register, nothing complicated.

“We see East Lothian Gift Cards come through on a regular basis and what we’ve noticed is that people tend to keep their gift card for something special. So, instead of the functional items like landscaping materials, they’ll spend it on shrubs, trees or water features. Every time they look at that shrub or water feature, it’s a reminder of the person that bought them the gift card and I think it’s a really nice way to spend it.

“Because they’ve received it as a gift, people look upon the East Lothian Gift Card as free money, so they’ll maybe splash out on that mini greenhouse or something they hadn’t budgeted for. Most people come in to spend their East Lothian Gift Cards between March and June, and we get lots over Christmas too.

“A lot of local businesses use the East Lothian Gift Card for staff long service awards. It’s a good card to give staff because of the choice and because the money has to be spent here in East Lothian. There’s nothing like seeing a product in person, especially when it comes to plants. If you buy plants online or in a supermarket, who do you ask if you need advice on the correct place to plant it or the right feed? It’s not just about the ability to put a product through a till, it’s the expert knowledge that comes with it. 

“As a business, we don’t have an e-commerce site, so we’re reliant on customers walking in and it’s beneficial for the customer because they get advice. Alongside our regulars, we have lots of new customers coming in who might be brand new to gardening, so that advice is essential. Being a part of the East Lothian Gift Card helps us to bring in new customers who might not have used us before.

“The East Lothian Gift Card has worked for us as a business with lots of extra sales through the till, and that’s what it’s all about. 90% of our sales are card payments, and as a business you need to find as many ways of accepting payment as possible. For any business thinking of joining their local gift card, I’d say there’s no harm in trying. It’s another method of payment and if you’re not part of it, then you’re losing sales.”

 

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