December 9, 2004, 12:00 AM

Fixing shipping charge glitches boosts gift card sales online

An analysis of last year’s customer behavior on gift card sales shows the abandonment rate as high as 90% for some online retail clients. Understanding why and changing how the charges are displayed and the cards promoted leads to a lift in card sales.

Kurt Peters

Executive Editor

Christmas started mid-year for some online retail clients of web analytics provider Coremetrics Inc.–that is, in terms of getting ready. And as holiday shopping reaches full swing, they’re seeing the benefits of early preparation in areas such as gift card sales, according to John Squire, vice president of product management.

“Last year was probably the first year where we saw any real growth of interest in gift cards,” says Squire. So mid-year, Coremetrics helped some clients dive deep into last holiday’s customer data on gift cards. For some, that analysis revealed a high abandonment rate once shoppers had placed the cards in their carts–in some cases, as high as 90%.

Analytics highlighted the presentation of shipping charges as one likely cause. Some of the merchants had entered gift cards on the site as a regular merchandising item, so the shipping charges listed reflected the value of the card purchased, rather than the actual charge for shipping such a small, light item.

“So a $100 or $200 gift card had the same shipping charge as $100 or $200 of merchandise,” says Squire. Or so it seemed to shoppers, who in many cases apparently didn’t see fine print actually provided by retailers below the shipping chart, stating that gift cards shipped at a standard, low charge. “People would see the charge in the chart and decide they weren’t going to pay $29.95 to ship a $200 gift card,” says Squire. He adds that with this information, some retailer clients altered how the information was presented in time for the holidays and are selling more gift cards this season as a result.

Another area that’s produced a lift in gift card sales for online retailer clients has been their use of analytic data showing which increments of gift card were the most popular, and their efforts to promote those increments, Squire says. If retailers that provide cards in multiple increments see from analytic data that the $75 card, for example, converts best, they’ve promoted the $75 card first on their site, adding language that the card also is available in other increments. “Calling that out and promoting it has driven people to buy the cards, reduce abandonment, and increased the sales they are getting,” says Squire.

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