Traverse City Record-Eagle

January 13, 2013

Downtown certificates set sales record for 2012

Downtown certificates set sales record for 2012

By Kathy Gibbons

TRAVERSE CITY — Sales of Downtown Traverse City Association gift certificates were off the charts for 2012.

In 2011, the Downtown Traverse City Association sold about $318,000 in downtown gift certificates.

Colleen Paveglio, marketing director for the DTCA/Downtown Development Authority said the sales goal for 2012 was $350,000.

Final tally: just under $400,000 — a more than 25 percent increase.

"I think we were at $200,000 going into the holidays," Paveglio said. "I know that we sold at least $150,000 during the holiday season. We had one day where we sold $38,000 by noon.

"And we've had more sales after the holidays this year than we have in the past."

The downtown gift certificate program began in the early 1990s, Paveglio said. In those days, participating merchants had to redeem them at the DTCA. Now the certificates are the same as checks and can go right in with a regular bank deposit.

"We just treat them like cash so it doesn't really affect our business any," said Red Ginger manager Blake Angove. "We just trade them in — off to the bank they go."

All but about four downtown businesses participate in the program today, making for more than 200 outlets where the certificates can be redeemed.

"That's all of the retail shops, the restaurants, places like Goodyear," Paveglio said. "We had somebody turn them in at an attorney's office downtown ... we say virtually any business in downtown Traverse City."

They're especially popular to use at restaurants.

"We have a lot of people come in and say, 'Oh, I was going to buy X restaurant, but this gives them a choice," Paveglio said. "We just did a count and we have over 50 places to eat in downtown Traverse City. That gives the recipient a lot of options."

When Paveglio started at the DTCA about eight years ago, she said gift certificate sales were at about $60,000 a year. As the association stepped up promoting them, more local businesses began embracing the idea of giving them to employees as a way of supporting doing business downtown — Munson Medical Center, the FIM Group, Hagerty Insurance and the Traverse City Record-Eagle among them.

"Some companies were upwards of $15,000" in 2012, she said.

Jonathan Klinger, public relations manager at Hagerty, said that as a downtown business, Hagerty wants to support other downtown businesses.

"I've received them in the past and it's a nice little incentive," Klinger said. "It gives you a chance to go shop downtown and pick out something you want."

Certificates are available in smaller denominations — $5, $10, $20 and $25. That makes them affordable for a variety of purchasers, and practical for participating businesses, which are required to give cash back for the balance above what customers buy.

"We don't want to go to $100 and somebody could go buy a pack of gum and get $99 back," Paveglio said.

Merchants say they see the benefits to the program, which include attracting new customers.

"I think a lot of people (with certificates) said, 'I've never been in here,'" said Rebecca Knott, manager at Haystacks.

Mike Thompson, service manager at Goodyear Auto Service Center on West Front Street, said the certificates get spent on everything from oil changes to repairs.

"It's another customer base," he said. "It brings more people through the door."

In business for 34 years, Mike Nolan at Nolan's Tobacco is an enthusiastic participant in the program.

"It's grown dramatically," he said. "It's been a great program to keep people shopping downtown."