Spa Gift Certificates

In Spa's best holiday ever — Part 3, I espoused the benefits of developing an advertising brief to help organize and frame your holiday promotions. Companies large and small use this tool to keep their focus where it needs to be especially when things get hectic.

Let’s talk about the first component of a Brief, the Background or Situation Analysis. It is valuable to take some time to think about where you stand and where you want to go for the holidays.

Holiday Promotion Brief:

• Background (situation Analysis).
• Target Audience.
• Measurable sales goal.
• Strategy.
• Tactics.
• Budget.

Background (Situation Analysis):

This is an opportunity to describe your spa business as it is today. This is time well spent because a “this is where we are” statement creates a benchmark for future improvements.

• Describe your spa's services and products.
• Explain the spa's current holiday challenges and opportunities:
• Holiday Promotion Challenges:
• Getting the spa's message through the holiday clutter to reach target customers.
• Manpower/time restrictions in developing and executing a spa holiday promotion.
• The current economy.
• Holiday Promotion Opportunities:
  • A spa's existing customers are the best customers.
  • Take advantage of opportunities to get your spa's holiday message to existing customers starting right now.
  • 50% of gift buyers wait until the last 48 hours to purchase their gifts. Your spa sells gift certificates on-line; this is a huge opportunity for last minute gift purchases.
  • More than ever consumers will be shopping online this holiday.
  • SpaBoom online gift certificates benefits:
  • No shipping costs for instant spa gift certificates.
  • Gift certificates can go directly to the recipient.
  • No Shipping deadlines, consumers can purchase gifts on Christmas Day!
  • Don't have to get in your car to purchase a gift.
  • Buy a gift certificate 24/7 and on Christmas Day.
  • It is never too late to buy an instant gift certificate.

In the next blog post we will be talking about understanding a target audience and how spas can take advantage of relationships with existing customers to increase sales over the holidays.

Posted in Holiday Promotion Brief, Spa Marketing, General, Spa Gift Certificates • Comment »

"Procrastination is the grave in which opportunity is buried." –Author Unknown

Before you know it, pumpkins will be all over the place and then a week later you will walk into Target and see red. It is in this moment that fear floods through the body and the realization strikes: procrastination has gotten the best of you. You have waited too long to plan a successful holiday season.

"When I was kidnapped, my parents snapped into action. They rented out my room." –Woody Allen

Don't wait. It is not too late to plan your holiday promotions, and with a little planning you can make this a record-breaking holiday for your spa. Take advantage of the lull that the end of summer brings and GET BUSY.

This is the time to think about how you can provide value to your customers. It is no secret that great service brings the prize of customer loyalty. Making your client's spa experience special and memorable is valuable to that person. They will want to help you succeed by buying Instant Gift Certificates from your website over the holiday.

So get ready now and you will experience a smoother, happier and more successful holiday sales season.

Holiday To Do List:

• Clean Up.
• Make sure all internal processes and procedures are working smoothly.
• Make sure spa employees are ready to make each client spa experience special.
• Clean the spa from top to bottom and give staff a visual image of your service expectations.
• Take care of the little things that are missed when everyone is too busy over the holiday.
• Make sure your spa website is updated and ready for the holiday.
• Update all content and contact information.
• Add a map and directions to your spa.
• Use the SpaBoom promotional content tool (accessed from Setup/Events) that allows you to enter your promotions that will go live at the dates you preset.
• Update your email list.
• Gather as many new email addresses as possible from your current customers.
• Purge the addresses you know are not correct.
• Have your list ready and set up in SpaBoom.
• Start thinking about a great service/product holiday promotion.
• Make sure you have the product in stock.
• Create POP (Point-of-Purchase graphics) to promote the promotion.
• The promotional offer should be visible in the spa and on the website.
• Make sure customers know your spa offers Instant Gift Certificates on the website.
• Develop POP that promotes the Instant Gift Certificates.
• Create an Instant Gift Certificate flyer to go into each clients bag.
• Make sure your website address is prominent in your spa.
• All advertising.
• On the door.
• Bags to business cards.

Now you're cooking. See how easy it is once you just get started? Go on, start ticking off the To Do list items, and look for more next week.

Posted in Spa Product Sales, Spa Marketing, Spa Business Management, General, Spa Gift Certificates • 1 Comment »

It was another great holiday for SpaBoomers, who utilized SpaBoom's Instant Gift Certificate feature to rev-up holiday sales! For the 2008 Mother's Day season, SpaBoomers sold a whopping $3.6M in Instant Gift Certificates, with the largest sales day occurring the day before Mother's Day, Saturday the 10th, which accounted for 18.3% of all Mother's Day sales.

Interestingly, Mother's Day itself was the third largest sales day, accounting for 12.1% of all Mother's Day sales. Not that it bears reminding, but it does bear repeating: Mother's Day is a Sunday when many spas and salons are closed, and more importantly FedEx and the other mail and overnight carriers don't ship. To give your mother a gift on Mother's Day, if you don't purchase an Instant Gift Certificate from a SpaBoomer, you're left with either no gift, hand-delivering something, or sending something on the Saturday before — a day early.

The above graph represents the sales activity of a select group of SpaBoomers, which is representative across all SpaBoomers (almost 2,500 spas and salons in all!). This particular graph represents the accumulated sales activity of those SpaBoomers who signed up just before the 2007 Mother's Day holiday season. It compares their 2007 versus 2008 Mother's Day sales. The differences are noticeable, and highlight an interesting 1-year trend: Sales increased a whopping 96.3% from 2007 to 2008, when using SpaBoom!

Some other interesting Mother's Day statistics include the average sales per SpaBoomer, as it relates to:

• The Top 10 SpaBoomers: $47,500
• The Top 100 SpaBoomers: $14,088
• The SpaBoomers in the top 50%: $3,569

Finally, SpaBoom witnessed a 111.6% increase in Mother's Day sales from 2007 to 2008, across all spas and salons.

If you wanted more sales for this Mother's Day, consider reviewing our Spa Marketing Guide for tips and tricks on how to increase sales and your exposure. We've watched what the successful spas and salons do, as well as watched what works on the Internet, and summarized it in this guide. You owe it to yourself to become familiar with it. If nothing else, scroll down to the bottom of that guide, and review the Don't Forget About the Real World section, which contains pragmatic and easy-to-implement suggestions that will have a quick and positive impact to your business.

Posted in Spa Marketing, General, Spa Gift Certificates • 10 Comments »

You know how fast and easy it is for your clients to purchase one of your Instant Gift Certificates. But have you noticed how easy it is to buy multiple gift certificates?

It's the power of the "Buy another" button — just change what's different for your new GC, like the amount or service and "To", and you've bought another GC!

It's perfect for last minute en masse gift buying and corporate rewards programs. In fact, this past holiday season, 11% of SpaBoomers' clients purchased more than one Instant Gift Certificate.

Posted in General, Spa Gift Certificates • Comment »

It recently occurred to me: SpaBoom is more than just selling Instant Gift Certificates (IGC's) on the Internet. Our platform is very robust, and provides a very complex (but easy to use) system our clients can log into to access a variety of tools, reports and features.

Unfortunately, if you have a business to run, you're probably not reading our documentation or spending much time getting a feel for the robust SpaBoom platform. Over the next few months, I'm going to briefly introduce some of the more powerful–and less documented–secrets of SpaBoom.

Print Retail Gift Certificates for Free

SpaBoom is a gift certificate management tool. Typically, when a sale is made over the Internet for an IGC, SpaBoom records all the details of that sale and makes it available to you when you log into your SpaBoom account. It was part of our design to enable you to do a number of things with an IGC, such as track redemptions, add value, void it, reprint it, resend it, etc. (see image on right).

When we first built SpaBoom, we recognized some organizations may want to use our system for selling retail-based gift certificates. So, we built this into the platform. With as few as 3 steps, you can use SpaBoom to produce lovely retail-based gift certificates:

1. Select "Add GC" on the left when you're under the GCs Tab.
2. Find the client purchasing the GC, and if they aren't already in SpaBoom, create a new client record by selecting "Add Client".
3. Fill out the "Add GC" form. Here's the trick: Make sure you select "Retail GC" as the Type. Retail GC tells us you want to use SpaBoom to generate a new, retail-based gift certificate for you. The other options in Type are available, if you want to use SpaBoom to keep track of your non-SpaBoom gift certificate sales, such as your pre-printed gift certificates (we do this for free, also).

Filling out the "Add GC" form within SpaBoom, is equivalent to buying an IGC on your website, except that we don't charge for any sales that occur this way. SpaBoom is smart enough to know when a customer is buying an IGC from your website or Spa Emergency, versus you ordering a retail-based gift certificate from within SpaBoom.

You will be given the same options to print or email the IGC, and if email, where to send it. You can also select a service-based IGC, instead of dollar-based, if that is something the customer desires.

Combine this functionality with a nice color printer and high-quality paper, and you have a professional, custom capability to print gift certificates right in your store. Next holiday season, consider turning your computer into a kiosk, and allow customers to purchase and print IGC's right in your store!

There are a number of reasons you might be interested in using this feature:

• An inexpensive way to provide professional, custom gift certificates at retail.
• A great way to provide custom, bulk gift certificates for corporate sales or promotional purposes.
• A great option, when you (or the customer) doesn't want a dollar amount on the gift certificate (service-based gift certificates just show the service, not the amount).

Excellent promotional opportunity (requires just a bit more work): Use this facility to print out a large number of special gift certificates you give away for promotional purposes. For example, cook up a special promotion with the local radio station or Lexus / BMW dealer, put in the To: line "Lucky Spa Goer" and the From: line "KOBZ Radio" or whatever appropriate. $25 or so each. Here's the great part about SpaBoom: You can change the expiration date of these promotional gift certificates to something short, like 2 or 3 months. Most states, even California, will permit expiration dates when the gift certificates are given away for charitable or promotional purposes (i.e. you haven't been paid for them). The only trick is, you will need to create a new Type in SpaBoom, and give this Type of IGC a different expiration date. You do this under the Setup Tab, using the "GC Types" task. Help is available.

Posted in Spa Marketing, General, Spa Gift Certificates • 6 Comments »

Tip #2a

"One of These Things is Not Like the Others…"

Remember that sing-song game that had you as a little kid searching for items in a group that were different from the rest?

Your eye is drawn to differences — it's how our brains are wired.

Like the human eye, which eagerly jumps to things that are new and shiny, so, too, do the search engines. If you change the content of your website on a regular basis, those search engines see the difference on their next go-around and re-index your site. The key to your increased visibility, however, is that once the search engine sees new content, it will re-index your site more frequently.

Say you're on a one-month "schedule" with Google. Change your site every other week and you might now get indexed every 14 days. Or every 7. Obviously I can't speak to their exact strategies, but it has been confirmed that the more you change, the more they will notice.

Read about this in more detail in this great article on the interesting website design blog, AHFX.

Use that knowledge to add some new content to your existing site, change a description of what you do, or jump right into your SpaBoom Dynamic Website and add some new feature information that really talks to your clients. Our Dynamic Websites are already search engine friendly, but regularly changing your own content is just another way to get a leg up on the local and national searches that your potential customers are doing right this very moment. As a bonus, Dynamic Websites automatically tell Google every time you change your site, including things like new specials in Events, encouraging Google to index your site more often.

Posted in Spa Search Engine Optimization (SEO), Spa Website Design, Spa Gift Certificates • Comment »

Guess what we learned this month? Last minute gift buyers spend more money, and packages help them do it! According to ABC News, people (mostly men) spend more the closer they get to a gift buying deadline.

The SpaBoom Valentine's Day data backs up that assertion. Our clients sold 1.5M in Valentine's Day Instant Gift Ccertificates (this includes sales from February 1 through February 14th). 60% of those sales happened on the 11th through the 14th. Our average sale for each of the first 10 days of the month hovered around $110. The average purchase from the 11th through the 14th averaged over $115. Why and how you might ask? Remember tip #3 in the Top ten ways to sell more gift certificates online? For those who forgot, it was "sell packages" for something more than the $100 most American males default to when faced with a spa menu. This holiday, packages were the preferred gift of your customers. If you don't believe me, argue with Cupid and our accounting team. In the first 14 days of this month almost 46% of SpaBoom gifts were packages. In December it was a little over 35%. This corresponded to an average transaction in February of $114.11 for Valentine's Day as opposed to 106.34 in December. If you are not selling packages you are leaving money your customer would like to spend with you on the table.

Overall, the numbers show that "occasion" gift buyers are willing to spend more, especially last minute AND they really like to buy packages. The good news is SpaBoom clients sell a ton of last minute gifts and we make creating service packages easy. So gear up for Mother's Day, but don't forget the birthday and anniversary packages to sell every day. Our customers seem willing to spend more for holidays like Valentine's Day, especially on the last few days leading up to the event. Give them a package that justifies that willingness and everybody wins.

Posted in Spa Marketing, General, Spa Gift Certificates • 4 Comments »

It was a very good holiday season, for those spas and salons selling Instant Gift Certificates on their websites using SpaBoom!

For the month of December, 2007, SpaBoom helped its clients sell a whopping $5.4 million in Instant Gift Certificates. This represents a 2.6 multiple over 2006. For those day spas who were with SpaBoom during the 2006 holidays, they experienced their online gift certificate sales increase by 27% on average, versus the same time period in 2006.

The above graph represents a day-by-day view of instant gift certificate sales across all SpaBoom clients. The 2006 line has been day-shifted back, by one day, so the weekend dips line up. The graph provides a number of very interesting observations:

• 21% of December's sales occurred on and between the 23rd and 25th, dates too late to be served by Express Mail.
• The biggest day occurred on Monday the 24th, with 12% of December's sales. Compare that to 2006, where the biggest day was Friday the 22nd, with 11% of the monthly total.
• While the sales during the weekend before Christmas dipped, the weekend volume was still outstanding, in comparison to the rest of the month.

We at SpaBoom want to thank all our clients for a successful 2007, and we all wish you the very best in 2008 and a Happy New Year!

Posted in Spa Business Management, General, Spa Gift Certificates • 6 Comments »

I already get the sense that everyone around me is in the same state of shock: the holidays are HERE and I didn't see them coming. It seems like "last week" was September, and the week before that?  April!  Sheesh.

While the postal service may be swamped with orders for last-minute package deliveries, YOU are in the perfect position with your SpaBoom Instant Gift Certificates. You can sell to your customers around the clock right up until the last possible minute they need their gift.

Use your website to loudly proclaim this fantastic ability. Put a display on your front counter letting everyone know about your website and your services available there. Tape a sign on your front door for the unlucky shopper who shows up when you're not open, reminding them that all is not lost if they need a gift for anyone.

In your marketing, target situations that illustrate examples of predicaments that your Instant Gift Certificates can help alleviate. Here are a few to get the ball rolling — use them or come up with your own unique calls to action:

"Aunt Betty showed up to the holiday dinner unexpectedly with a really great bottle of wine? It's no problem when you know you can visit us online and get her a great little thank you in 5 minutes."

"Arrive at a friend's dinner party with nothing to offer the host? Grab a few minutes on their computer to order an Instant Gift Certificate and have it emailed to them on the spot!"

"Disappointed at early closing hours for other holiday stores? On our website, you can always get Instant Gift Certificates for your wish list friends - no mailing or trips to the store required!"

Get creative and see a noticeable spike in your last-minute shoppers — good luck, and the best of the season to you!

Posted in Creating Customers, Spa Marketing, Spa Gift Certificates • Comment »

We looked at the sales volume of a large group of our clients for the last few days before Christmas in 2006, which is represented hour-by-hour in the following graph. It is very interesting.

If you assume the average spa or salon is selling gift certificates from 8am to 8pm through the 24th, and is closed on the 25th, a full 33.4% of gift certificate sales occurs outside those normal business hours.

Ideas to help sell more gift certificates for this holiday season:

• The obvious — stay open as long as possible.
• If your phone is busy, what then? Do you have multiple lines and call-takers, and if a customer can't get through, does your call prompt tell your customer they can purchase "INSTANT Gift Certificates…" on your website "…perfect for last minute gift buying?"
• If you're one of our busier organizations, what does your car traffic flow look like? Is it possible your losing customers because they see a long queue in front of your store? Consider signage or banners that announce your web address, and make sure to say "Instant Gift Certificates" available.
• And, of course, if you're not using SpaBoom and just lurking on our blog, what are you waiting for??!?

Only instant gift certificates are going to enable you to capture these last minute sales.

Posted in Spa Marketing, General, Spa Gift Certificates • 5 Comments »

The US Post Office recently posted their Holiday Shipping Calendar, as a special service to its customers for ensuring "cards and packages arrive by December 25th."

As spa and salon owners, it's good to take note of these dates to advise your gift certificate buying clients accordingly. For shipping in the US, the absolute last deadline to mail something — to be received by the 25th — is December 22nd using Express Mail.

We've found, after helping our spas and salons sell $12.3 million spread over 114,382 instant gift certificates, that nearly 50% of the gift certificate sales will occur within the last 48 hours of a holiday or event. So, if you utilize SpaBoom effectively, you can potentially double your instant gift certificate sales on the 23rd, 24th and 25th of December — dates the US Post Office cannot serve.

What are you doing to take advantage of your last-minute gift certificate buyers? Do you mind sharing your tips and tricks with other SpaBoomers?

Posted in Spa Marketing, General, Spa Gift Certificates • Comment »

Look for three new All Occasion designs:
 

   

 
We've added a Thank You category, which now includes:
 

 

 
For a quick reminder on how best to add new designs (and give older designs a little break), please see New GCs and Popularity.

Enjoy, SpaBoomers! And thanks again, Joyce, for creating more inspired designs!

Posted in General, Spa Gift Certificates • 6 Comments »

Posted in General, Spa Gift Certificates • 2 Comments »

We've been adding new GC designs left and right, and now might be a good time to put away some of your Instant Gift Certificate designs that you've been using for awhile, and show off the new options, just to keep things interesting and fun.

Here's how to customize your customer's GC experience on your site.

When your customer loads your IGC page, they see, by default, the designs that have been marked as "Most Popular". This setting is a drop-down item in the Gift Certificate details view, shown here (just under the name of the GC):
 

 
Currently there are six (6) designs that are globally marked Most Popular, and those will show in addition to any that you have marked. So, if you have chosen 3 Most Popular that are different from ours, your customers will see 9 in total. Keeping it to an even number (six or eight) is visually more appealing, so keep that in mind when selecting those Most Popular items.

To only show the defaults we have selected (resetting all of the global GCs to the current defaults), both for Most Popular as well as Hidden/Not-Hidden, simply click the link on the lower left corner that says "Restore Defaults":

Again, that will undo ANY changes you have made to the settings of our original GC Designs. Your Custom GCs that you have uploaded (if any) are safe.

Posted in Tutorials, Spa Gift Certificates • Comment »

We should really call this article "Joyce rocks!" Because she does. She's the one creating all of the new designs you're seeing, and there's more to come! So thank you Joyce for your much-appreciated beautiful designs!

Look for:

2 Wedding designs (Cake and Doves, and White Lily). We know it took awhile to get a Wedding category, but here ya go!

2 new Birthday designs (Happy Birthday Pussycat and Yellow Birthday.)

2 All Occasion designs (Feather, and Lotus.)

These new designs have been automatically added to your "Most Popular" group for your online shoppers, as will the subsequent designs we're creating, but you can always customize by changing the individual settings on each GC design. See our next post for some tips on the "Most Popular" configuration.

Enjoy!

Posted in SpaBoom New Features, Spa Gift Certificates • 2 Comments »

Anyone who's ever played the Road Warrior role knows that it's a mixed blessing. On one hand being out there representing your business and making things happen is incredibly exhilarating, on the other it's about schlepping through airports, stripping down for security, cabbing through traffic, presenting well-prepared material to your business audience with an eye to dazzling same, entertaining clients until the wee hours, and generally tapping into all personal resources, all the time.

Face it, you can't be a wimp and survive long as a Road Warrior. In fact overcoming and adapting as soon as possible will ensure survival in the marathon that is life on the business road. Nurturing the child within (and the sore traveler muscles on the outside!) with some pampering, massage, skin care or other fabulous rejuvenation offers up an essential boost in the face of crazy schedules.

The May/June edition of Pulse, ISPA's publication, noted this:

This trend means spas need to cultivate that business audience! Form relationships with local business class hotels, and let them know you offer not just fabulous services, but offer Instant Gift Certificates online, which makes obtaining a service super convenient.

Create premium Instant Gift Certificate packages that include services bundled specifically with the Road Warrior in mind. Consider including a nice takeaway product in the packages, maybe private labeled lovely lotions or bath items that will reinforce the great treatments those travelers enjoy in your spa.

Posted in Creating Customers, Spa Marketing, Spa Gift Certificates • Comment »

We've added to our Instant Gift Certificate designs, and will continue to do so over the coming weeks. These two are the newest additions; we'll send out blog posts with each new group that goes up.

   

We recommend mixing up the Instant Gift Certificate designs that you offer your online clients–they like fresh designs to choose from as they meet their gift giving needs! You can simply log into your SpaBoom account, go into Setup, GC Designs, and hide designs that you'd like to put away for awhile. You can Hide by clicking on the title of the Gift Certificate design, then selecting 'Hide' at the bottom of the next screen. (The checkbox is above the picture of the Gift Certificate.)

To see all designs, hidden and active, click the "Show hidden designs?" checkbox at the top of the GC Designs screen. You might find some in there that strike your fancy, or that you haven't even noticed before. If you find some great ones, you can "un-hide" them by clicking on the design title, then unchecking the Hide box.

Once you're done making any changes to your GC Designs, you don't need to do anything for them to be visible to your online visitors - it's already completed!

These 2 designs will automatically appear Active for your online shoppers unless you Hide them, as will the subsequent designs we're creating, but you can always customize using the tips above.

Don't worry, though, we'll let you know each time a new batch is out there for you to check out!

Posted in General, Spa Gift Certificates • 1 Comment »

Do you remember your very first visit to a spa? Did the experience lift you out of your usual worldly existence and, just for a little while, take you to a soothing and invigorating destination? Since you've obviously decided to take up shop in the spa business, I realize I'm preaching to the choir, but those memories are still important.

My own first spa visit was enjoyable and fun - it was to Betty's Bath (one of SpaBoom's original clients), when SpaBoom was a twinkle in a programmer's eye. The building was tranquil, the colors inside deep and inviting, and the camaraderie between guests and staff infectious.

Selling Instant Gift Certificates to your existing customers is a great first step in the growth of your spa. Along the way, do not forget about the third party - the GC recipient. They might be completely new to the spa experience, and you've got a fabulous opportunity to show them why they should change their thinking from "a spa is a nice but rare treat" to "spas are a necessary indulgence I deserve in my life".

When a new guest comes in the door brandishing an Instant Gift Certificate, pounce on the chance to "wow" them at every turn. For at most a 5% fee on their services, you've got a person that already trusts the recommendation of the gift-giver, your client. If their spa experience is fabulous, they will soon trust your staff as well.

• Have an enthusiatic staff member show them around the building and available facilities, including the ones your new guest might not be using on their first visit. Once they see how relaxing the areas are, they might be inclined to add services on top of their existing appointment.
• Guide them through what their experience will be like, and then live up to those expectations.
• On their way out, a follow-up gift to remind them of your spa while at home is a nice touch: a small bottle of lotion if they had a massage, or a mini loofah if they tried a body scrub. All the better if your spa's logo is on the packaging.
• Finally, a small reward for a new booking on the spot is entirely appropriate - a better rate on a package deal, their choice of product thrown in to any service - use your imagination and tailor your incentive towards their experience that day.

Acquiring new customers is a huge topic, so consider this just a starter post to get you thinking about always building your client relationships.

Posted in Creating Customers, Spa Business Management, Spa Gift Certificates • Comment »

Overview

New Mexico has joined the growing list of states that regulate gift certificates. HB0127 was signed into law by Governor Bill Richardson last month, and takes effect July 1st, 2007.

This law, like many of the others, has the best of intentions but really ends up hurting small businesses. It is my sincerest hope that eventually, our legislators will look past the mentality of "I have no sympathy, because businesses just use your money and hope you will lose the card!" (actual quote from an unnamed NM State Legislator). Without going into a diatribe, some of the high-level problems with this statute are:

• Five (5) year expiration date – For a product- or service-based GC, there is a significant chance the product or service will no longer be available or cost significantly more than what was originally paid for, at five years. Also, the five years is a long time for the small business to keep a liability on the balance sheet.
• No fees, including at time of sale – The language used is imprecise, and can suffer from many interpretations. A conservative – and reasonable – interpretation would be that no fees of any form can be charged against the GC, including but not limited to gross receipts tax, shipping and/or handling charges, surcharges or convenience fees.
• Modifies 7-8A-2 NMSA 1978, Presumption of Abandonment, to the Uniformed Unclaimed Property Act (UUPA) – GC’s are considered abandoned property, if "unclaimed 5 years after December 31st of the year in which the GC was sold." This means GC sellers must turn in the money obtained from GC sales to the Tax and Revenue Department of New Mexico, if not redeemed. This legislation assumes GC revenue is “free money,” and doesn’t appreciate the many costs that go into selling, maintaining and redeeming GC’s: CC transaction fees, handling fees from service providers, and staff time.

There are many ways to help protect consumers, while avoiding hurting small businesses. For example:

• Require the expiration date and key terms and conditions to be prominently displayed on the GC.
• Prohibit expiration dates of less than a year, unless charitable. Five years (or indefinite) is too long.
• Require a phone number and contact information on the GC, where a holder can call to inquire as to the status of the GC.
• Require businesses to honor their GC’s.

New Strategies to Maximize Revenues Given Gift Certificate Laws

I believe this applies to everyone, not just New Mexico spas and salons.

When you sell a GC, it cannot be counted as revenue, since it's actually a liability. The money goes on your balance sheet as a liability, where it stays until one of three things happens: The GC is redeemed, the GC expires or the GC is turned over to the state. The goal here, is to move the GC amount from the balance sheet to your income statement. You can only do this, if your GC is redeemed or you expire the GC.

Therefore, if you're in a state that does NOT regulate GC expiration dates, you benefit by having a reasonable expiration date because it helps you achieve your goal of recognizing that money as income. My recommendation in these jurisdictions: Use a one (1) year expiration date, but if someone walks into your spa or salon with an expired GC, take it! You have an opportunity to obtain a new customer, or at the very least, a happy recipient who may refer new customers to you.

If you're in New Mexico or one of the other states that regulate GC expiration dates, the strategy changes. You can ONLY recognize a GC sale as revenue if the GC is redeemed. You need to think about strategies that cause folks to redeem your GC's. In New Mexico, waiting the five years to expire a GC doesn't really help, since you're now required to send in the funds to the State of New Mexico, given the modification to the UUPA (more on this in an upcoming blog article).

No or long-term expiration dates also create potential issues for service-based GC's. Over time, products or services may no longer be available or increase in price. You are only required to honor the value paid for GC's. Do you need to put the value-paid for a GC on the GC? No. Should you create a policy with respect to long-term, service-based GC's? Yes.

Here are our recommendations:

• Expire your GC's if you can, within the parameters of the law, and always accept your GC's even if expired.
• Work hard to get customers to redeem their GC's:
• Consider promotions for GC holders.
• Use SpaBoom to send out newsletters and reminders to your GC customers.
• If customers lose their GC's, look it up and print a new one. SpaBoom makes this easy, if you use SpaBoom to manage your GC's.
• Over 60% of GC buyers prefer service-based GC's, and those buyers spend more, on average, than dollar-based GC buyers.
• Continue selling service-based GC's, and maintain the personal touch by NOT placing purchased amounts on the face of the GC's.
• Create a policy around service-based GC's, by offering the service for a year and converting the GC to cash-value after a year. In SpaBoom, you can add to the "GC fine print:" under Setup, Basics, with the following language: "Reverts to cash-value after one (1) year."
• To reiterate, I do not believe you should consider including the cash value on all GC's.
• Get ready to start filing reports to the State of New Mexico, and sending in the cash for unredeemed GC's. Many states have some form of UUPA on the books. SpaBoom will be publishing more information about this shortly. Stay tuned.
• When buying or selling a spa or salon, do NOT forget about the GC liability. Simply hanging a sign, "Under New Management," will not prevent customers from demanding redemption of their GC's, and can create serious legal consequences if not handled properly.

In Summary

If you're in New Mexico, you must change the expiration dates of GC's sold on or after July 1st, 2007, to five (5) years or more. Start changing your mindset, and your policies, regarding longer-term GC's. Start thinking about how to get folks to redeem their GC's.

Consult with your tax expert or attorney, to make sure you're doing things properly.

Finally, stay tuned. SpaBoom will be publishing more information about the GC laws in all states, as well as UUPA compliance. We are also thinking about better tools to help you with legal compliance, as well maximizing GC profitability. Do you have suggestions or ideas?

Posted in SpaBoom New Features, Spa Business Management, General, Spa Gift Certificates • 5 Comments »

SpaBoomers know the benefit of offering Instant Gift Certificates. More and more national retailers are picking up on the idea, implementing some form of online gift certificate capability. Jakob Neilsen has recently done a usability study of the online gift giving capabilities of major retailers like Macy's, Nordstroms, LL Bean and Cooking.com.

It's a bit shocking the ways in which these big retailers fall short:

• Almost all only allow emailing gift certificates, completely missing the personal touch of printing a GC and including in a card or hand delivering. More than 75% of SpaBoomers' Instant Gift Certificates are printed.
• Little or no personalization: rarely do you get the option of choosing different designs, and message capabilities are often very limited.
• The actual email for delivering gift certificates tends to be very corporate and impersonal — focused on the retailer, and not the gift giving experience.
• Most retailers use the same shopping cart approach for gift certificates as for products, causing tons of confusion, like asking for a shipping address when emailing a gift certificate.
• Big delays in emailing gift certificates — it's not unusual for retailers to take hours to email a gift certificate, and some take days.

Posted in General, Spa Gift Certificates • 1 Comment »