3 Reasons to Avoid Closing Gifts
Many successful real estate agents offer closing gifts to their clients. They claim gifts can enhance their image and encourage repeat business and referrals. However, some people advise against giving gifts because they may be a waste of time and resources. Here are three reasons why some agents do not provide closing gifts, along with the possible repercussions of their actions.
- Closing Gifts Cost Too Much
A good closing gift is costly. You may need to spend hundreds of dollars or more, but this opinion is not valid for several reasons:
- You can buy memorable yet inexpensive closing gifts for under $100
- As long as you choose gifts the clients can use, they will be appreciated
- Your gifts can be effective without spending a lot of money if you select gifts that are not cheap promo items or inexpensive trinkets
- If you choose the right gift for your client, you will not have to overspend
- The corporate gifting market is very active and effective, generating a staggering 125 billion dollars in 2018!
The market for non-cash business gifts is estimated to total $125 billion.
- My Doctor or Lawyer Doesn't Give Me Gifts
My dentist, doctor, and attorney do not offer gifts, so why should I provide closing gifts to my clients? If I provide gifts, my clients may see me as something other than a true professional. Besides, my services are more than enough compensation for the commission I receive. I think the client is getting a great bargain, so there is no need for anything extra.
On the surface, these reasons to avoid gifts seem legitimate, but when you look a little closer, you can see the differences between real estate agents and most other professionals, such as a Doctor. Generally, there is a shortage of Doctors, and they don’t have to market themselves to obtain new patients. As a result, gifts are not necessary.
The corporate gifting market is very active and effective. If it weren’t, it would not have been worth a staggering 125 billion dollars in 2018, according to an article from Forbes Magazine website.
- The Ends Do Not Justify the Means
Spending a lot of money on a client, you already serviced may not seem like a good idea. You may not be able to deduct the entire amount from your business taxes. For instance, the Internal Revenue Service only allows you a $25.00 deduction for each gift. If you spend $100.00 on a nice gift, only one-fourth of the cost can be written off your taxes. Taxes are the reason many agents do not provide gifts.
It is true, you may not receive a full tax deduction from your gifts, but taxes are not the primary purpose for closing gifts. Here are some significant reasons to consider client gifts:
- A thoughtful gift is forever - The client keeps the gift, and it is a continued reminder of your services. It is inexpensive advertising.
- Your image in the community is enhanced.
- You stay top of mind with the client - he or she is more likely to refer you or look you up for future business.
- Gifts create goodwill.
- Clients enjoy getting something extra that was not expected.
Things to Remember
Closing gifts are a common practice for many successful real estate agents today. However, not everyone believes in this practice because they feel the cost is too high. However, if you examine these reasons more closely, you can see why they may not be valid. For instance, when you use a reputable closing gift vendor, you can purchase very useful gifts at reasonable prices. The real estate industry is different from most because it involves a significant purchase. There are many reasons for closing gifts, besides the meager tax deduction, which makes them an excellent investment for your business.