Let’s face it: printing off a gift certificate is cheaper than ordering plastic gift cards.  And yet plastic gift cards are a better bet for your business.

The first reason is strong enough that it might be enough of a reason all by itself. Gift cards are more appealing to customers. There may not be a big difference between gift certificates and gift cards in terms of how they function, but they feel different.

Your customers can put a gift card into a special holder or wallet, it’s more substantial than paper, and it can be customized to look special and gift-worthy. It feels more like a present when customers buy it, and also when the recipients spend it. A gift certificate may feel like a coupon. A guy might hesitate to use that restaurant certificate when he’s on a date for fear of looking cheap. The experience of using a gift card is like using a debit card or a credit card – the average American’s preferred way of paying.

So your customers will like it. Is that worth the extra cost? If not, look at all the advantages gift cards offer you, the merchant.

They bring people into your store or onto your ecommerce website. They can even bring those customers in repeatedly. Where you might have to give cash back when a gift certificate is used to purchase an item of lesser value than the gift certificate, you just hand the gift card back, still holding value. The customer will come back to spend the rest.

You can even make your gift cards reloadable, so the cardholder can add more money to the card. Point out to parents what a handy way this is to help their students control their spending, and offer easy ways for parents to reload the cards periodically. Or suggest to the gift card recipient how nice it would be to have a little shopping spree of her own available sometime in the future – it’s like giving a gift to herself. “You have only two dollars left on this card,” you can say when you hand it back, “but you can reload it if you’d like to have it handy.”

Suppose the recipient doesn’t spend that last two dollars? That’s fine, because you’ve already been paid. This is called “slippage,” and some studies estimate that 10-15% of all gift card value is never used. That’s a nice little bonus for you.

Gift cards are also more secure than gift certificates. They have to be activated and are very hard to copy. A gift certificate duplicated on a copy machine might be accepted on a busy day.

Branded plastic gift cards are also like an ad your customer carries around and gives to others. All the time the gift card is in her wallet, she’s going to see your logo and think about coming to your place of business. You just can’t get that with a gift certificate.

You’ll be surprised by how affordable branded plastic gift cards are, and they’re supported by quality merchant services providers  in the same way credit cards are. Give it a try!