Vouchers vs Direct Discounts: Which is Better for a Retail Merchant?

Both vouchers and discounts may spur consumer interest and spending for a retail business. But which will yield more desirable results?

Difference Between a Voucher and Discount

Vouchers and discounts are two ways to score a sweet deal on a product or service. But they’re not exactly the same.

A voucher is like this special coupon or code that you show to get a sweet discount. But a discount is just a price cut that you can get without any voucher fuss. Vouchers are all specific and need you to do something, while discounts are more general and usually just happen automatically.

Let’s break it down and take a closer look at these two money-saving methods for consumers.

Condition: Entitlement and Availability

Vouchers are like little money-savers that give you the entitlement to enjoy a specific amount or percentage off of the total price when you’re making a purchase. They’re basically these nifty things handed out by the merchant to reel you in and make you want to buy their stuff. It’s like a promotional strategy to get customers hyped up and excited.

A discount means you get a cheaper price on something without having to use a voucher. The store just lowers the price to encourage people to buy it.

Redemption: Exclusivity vs Non-exclusivity

Vouchers are like these things you show when you’re buying something to get a discount. They can be like pieces of paper you hold, or like special codes or vouchers on your phone or computer.

For discounts, usually, you don’t have to do anything extra to redeem them. They usually just happen automatically when you’re checking out or buying something.

Application: Usage and Limitations

Vouchers come with all these fancy rules and stuff, like an expiry date, limits on how you can use them, or even who can use them. Sometimes, they only work for certain products, brands, or services, or you have stick to specific stores or online platforms.

Discounts are way more easy-going when it comes to how you can use them. They might give you a deal on certain items, a whole category of products, or just the whole shebang in the store or online.

Approach: Strategy and Outreach

Vouchers are like those cool tricks businesses use to grab attention and get people excited about their stuff. They’re handed out all over the place, from newspapers and magazines to emails and social media. They’re all about hooking new customers, showing appreciation to the regulars, and hyping up special deals or services.

Discounts can also be like a marketing trick, but they’re usually part of bigger promotional plans, like those sales when the season changes, getting rid of stuff events, or those special deals that don’t last long.

Why Vouchers Might be Much Better for Retail Merchants

Some store owners think that dealing with vouchers is a total pain and doesn’t give them instant results, so they’d rather just lower the price right away. Yeah, giving a straight-up discount can have an immediate effect. But in the long haul, using vouchers can bring some perks that direct discounts can’t beat.

Avoid Perception of an Inferior Product or Service

People might question the quality of discounted stuff, thinking that maybe it’s not popular or it’s not up to snuff, and the discount is just a way to get rid of excess stock. But if you use a discount voucher, it can ease those doubts because you know not everyone gets to enjoy the discount, and you can trust that the product’s quality is still the same as when it had its original price.

Maintain the Original Price Point in the Forefront of Consumers’ Minds

Consumers have this idea of how much they think a product should cost. This idea is based on what they think the quality is like and what the actual price is. When there’s a straight-up discount, it brings down the expected price that consumers have in their heads. But using a voucher is a bit sneaky because it’s like giving different prices to different folks. This way, the original expected price stays intact in the minds of consumers.

Prevent Customers from Perceiving the Price Reduction as a Permanent Change

In a crazy competitive market, merchants need to play the price game to stay ahead. But let’s be real, that can mess with a brand’s reputation. When you constantly offer long-term discounts, customers start thinking it’s the new normal price. That’s where vouchers swoop in like superheroes - they help keep those price slashes under wraps and give you some sneaky savings.

Vouchers Would Likely Yield Better Results

Digital vouchers are way cooler than plain old direct discounts. They have a better impact on customers’ minds and help build up your brand in the long haul.

“This is the way.” - Din Djarin, The Mandalorian

If you are a retail merchant and would like to start issuing vouchers to spur consumer spending but unsure how to start, here’s a solution for you.

Purple Rewards brings together marketing and technology onto a mobile platform that allows users to discover retail deals around their real-time location. Purple Rewards offers merchants a range of packages to suit their every marketing needs, bringing online solutions to offline purchases.

Among a sea of competition offering business solutions, Purple Rewards offers the differentiated proposition that retail merchants only pay for successful customer conversions.

Learn more about Purple Rewards at www.purplerewards.co.