According to this article in the Los Angeles Times, about 8-10% of small businesses today offer gift cards, up from 2% two years ago. The costs of setting up to offer gift cards can be as low as $800 plus a small monthly fee. Many small business owners report selling many more gift cards than the paper gift certificates they previously offered.
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There are many reasons why so many small businesses are offering gift cards. Using the a gift card profit calculator, if a business were to offer 30 cards at $.25 per card while paying a $25 setup fee, a $12 monthly fee and the cards were activated with an average of $50 the profit for the business could be as high as $970.47.
So gift cards are not only a very good option for business owners but for consumers as well because of their flexibility.
Reference to the gift card profit calculator:
http://regalpaymentsystems.com/resources/tools/gift-card-profit-calculator/