From the November 2003 issue of Entrepreneur

When Paul Bischoff started giving away teddy bears during the holidays as a gift with purchase, he never dreamed it would spark a collection craze with customers. Twelve years later, people return to his Earth Treasures jewelry store in Eatontown, New Jersey, each year to get a bear, moose, snowman or other plush toy-sometimes shelling out hundreds more on purchases to get the next larger size. "[The promotion] brings customers into the store. It makes them smile, and they even spend more to get a bigger free gift," says Bischoff, 54. The plush promos start with a $100 purchase and grow bigger at the $300, $700, $1,000 and $1,500 spending levels.

Claire Rosenzweig, president of the Promotion Marketing Association of America, says gift-with-purchase offerings can drive sales, build your brand and make customers feel good about shopping in your store. She offers these tips for great gifting:

  • If you have an upscale image, choose a gift that reflects that image.
  • Be sure you can satisfy demand for the product; otherwise the offer could backfire.
  • Make sure the gift makes sense for your business.