If gift certificate sales don’t account for at least 10%-15% of your salon’s gross sales, take a second look at how you promote this service area.
“Gift certificate sales account for at least 18% of our business each year,” says Michael Williams, owner of Nails by Jan in Sarasota, Fla. “It’s foolish not to promote gift certificate sales because there are men who don’t know what perfume their wife or girlfriend wears, but they usually know where she gets her nails done.”
Not only are gift certificates ideal for other people to buy your current clients, but gift certificates can help develop new clientele.
“Often the first time a person comes in to a salon it’s because they’ve been given a gift certificate, and we have very good retention of those people because they leave with a really good feeling,” says Elaine Shapiro, owner of Elan Salon & Day Spa in C Cranston, R.I.
“Our client retention from gift certificate sales has been excellent,” says Rebecca Moore, owner of Just Nails in Erlinger, Ky. “If you get clients in the door and do a quality service, you’ve got a new client.”
According to Frank Gruber, owner of Avant6 salon in West Chester, Pa., nail services make ideal gifts because everyone can get the service and there is a range of services to fit any budget.
Here, salon owners share their most effective promotional and marketing tips to build a salon’s gift certificate sales.
1. Tap last-minute shoppers with an advertising blitz before major gift-giving holidays. “We advertise that it’s OK to be last minute because we can provide you with the gift they’ll love,” says Linda Rackner, director of advertising and marketing for Seattle-based Gene Juarez Salons. “Let them know it’s already wrapped; all they have to do is call and we’ll send it to them.”
For the two-week period prior to any major holiday, Gadabout Salon and Day Spas runs a 1/8-page ad promoting gift certificates. “Our sales usually increase about 55%,” notes Ernest Padilla, director of marketing and education for the Tucson, Ariz.-based salon chain.
2. Try a little suggestive selling. With your client’s permission, call her husband and suggest a gift certificate for an upcoming birthday, anniversary, or holiday such as Valentine’s Day or Mother’s Day. When a client mentions a friend’s upcoming bridal or baby shower, suggest a gift certificate as an ideal gift that is truly “just for her.”
3. Make it special. De Edra Carter, owner of Fortune 500 in Rogers, Ark., has an arrangement with a local florist, who for $15 more will create a basket of flowers to accompany a gift certificate. “For $50, someone can get a basket of flowers delivered with a gift certificate for a manicure and pedicure,” Carter says. For $35, they get the basket of flowers and a gift certificate for a manicure.
4. Cross-promote your gift certificates with other businesses. For example, the local florist also offers Carter’s gift certificates to her own floral customers. In Dallas, Dayton Mast of L’Image Salons teamed up last year with Morgan’s Chocolates to create a “Love Potion #9” promotion for Valentine’s Day. “For $199, the Valentine’s Day package came with this wonderful box of chocolates, a heart-shaped glass bottle filled with pink bubble bath, and a beauty package,” he says. “We had people lined up outside the door to buy it.”
5. Men are clients, too, reminds Scott J., owner of Scott J Salon and Spa in New York City. “I encourage women to buy a manicureand pedicureas the perfect Valentine’s Day or Father’s Day gift for their partner. For executives, I’ve packaged a manicure, a massage, and a trim.”
6. Let clients know that anytime is a good time for gift certificates. At Wild Ivy Day Spa in Rockport, Mass., owner Leslyn Zak recently put a basket of gift tags at the front counter witha sign that says, “Gift Certificates Available Year-Round.” The tags have messages like, “I’m So Sorry,” “Thinking of You,” and “Happy Birthday.”
7. A manicure makes the ideal teacher’s gift. A few weeks before school lets out, Shapiro advises placing a sign at the front desk and nail stations suggesting this as the ideal thank you for teachers.
8. Include gift certificates in your yellow pages ad. “Itwas something I had never thought about,but I have found I get alot of calls from it,” Moore says. She also promotes salon services with storefront banners, explaining, “We’re less than 50feet from abusy street and when we do a banner on gift certificates we get a lot of men who stop.”
9. Direct mail works. “We have a mailer that says, “Gift certificates are great for ....” Moore notes. “And then it says, ‘Get the message?’ Those always get a great response.”
10. And don’t forget the simplest promotion of all: Put them where clients can see and ask about them. “We have one hung on thewall in a picture frame, and another displayed at the front desk,” Williams says.
Gift Certificate Accounting 101
Remember, gift certificates are for the client, not for the salon. While you may be tempted to enter them as a sale, Williams cautions that they should be treated as a liability. “When you sell something to someone but they don’t take delivery of it, if s a liability, and you should treat gift certificates as such until they are redeemed,” he advises.
Handled this way, gift certificate income doesn’t become part of the salon’s or the technician’s gross income until the liability is cleared. Too, it prevents the feeling that you’re working for free. “If you count the money as income when you sell the certificate and then four people use their gift certificates in the same week six months later, you feel like you’ve worked for nothing,” says Carter, who speaks from experience. “I never pay myself for the certificate until I actually do the service.”
To prevent gift certificates from becoming a true liability by tying up large amounts of money, encourage a quick redemption with “Please use by” dates on the front (not an expiration date), and follow up with a phone call to the recipient. “We keep a record of the value of the gift certificate, if a tip was included, the date of purchase, the names and numbers of the person who bought it, and the recipient,” explains Zak. “Ideally, we call them after 3 to 6 months if they haven’t called us.”
Beware of Unclaimed Property Laws
In 1996, Michael Coe, owner of the Seattle-based Gene Juarez salon and day spa chain, was surprised by a visit from his state’s unclaimed property department. “The inspector came in and said, ‘I see you’re not filing unclaimed property reports.’ I said I didn’t know there was such a thing.” He soon learned, however, that there was — and that it was going to cost him.
Washington state law requires businesses to transfer the liability of unclaimed property to the state after five years. “If a gift certificate isn’t redeemed after five years, it becomes unclaimed property,” Coe explains, having now done his homework on the subject. “You have to file a report and pay the amount you’ve received for unredeemed gift certificates to the state, and they assume the responsibility to find those people,” he adds, noting that 80% of the funds go unclaimed and end up in the state’s general revenue fund.
When all was said and done, the state went back in Gene Juarez’s records to 1986 and Coe had to pay the state for all unredeemed gift certificates that were five years old and older. Coe declined to name the specific amount, noting only that it “came up in the medium six figures.”
His advice? Check your state laws on unclaimed property and gift certificate expiration dates, because they do vary. In Massachusetts, for example, salon owner, Zak says gift certificates must remain valid for at least two years before being considered unclaimed.
In California, on the other hand, attorney Paul Stam, of Irvine-based Kring & Brown, notes that unclaimed property laws require the liability be transferred to the state after three years. However, because California law changed as of January 1, 1997, to forbid expiration dates on gift certificates that are “exchanged for value” (i.e., paid for), Stam says gift certificates are exempted from the unclaimed property law.
Reach Outside Your Market Area
A woman in Georgia learns her best friend in California is pregnant. A gift certificate for a pedicure presents the perfect way to say congratulations, but where does she shop? Increasingly, both men and women are searching the Internet, and thousands of salons are there waiting with appealing web pages that promote their services — including gift certificates.
Is the Internet still a little too high-tech for you? Then consider one of the new nationwide salon and spa gift certificate services that work similar to 1-800- FLOWERS — only in this case it’s Salon USA’s I -800- GO-SALON. You list your salon with the service for a small fee, and when someone calls requesting a gift certificate to a salon in your area, they’ll sell the gift certificate on your behalf.
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