Why offer gift cards?
Before investing in a gift card program, ask yourself if gift cards are right for your store. Malcolm Fowler, Vice-President and General Manager at Ernex, a division of Moneris Solutions Corporation, says gift cards work well in stores serving repeat visitors. Stores that sell products or services that work well as gifts may also benefit from a gift card program. Don't close your eyes to the possibility that your store can be sold as a gift.
If gift cards are right for your store, consider this:
Gift cards are secure. Unlike gift certificates, gift cards offer an increased level of security. They can't be photocopied and they can't be reused without a retailer's validation. In fact, gift cards are valueless until a retailer runs the card through the store POS system and assigns a dollar value to it. This also allows open displays of gift cards without worry of theft or fraud — something you can't do with gift certificates.
Gift cards are easy to use. Thanks to new technologies, gift cards are remarkably easy to use. Most POS providers offer some kind of gift card program that integrates into a store's existing POS system. Gift card sales show up on the end-of-day receipt as a separate line item, not unlike credit cards, and the remaining gift card balance appears on the customer's receipt.
Gift cards are easy to process, too. The POS system tracks the value of gift cards, meaning retailers don't have to provide change on gift card sales (as they might have done with gift certificates) and they don't have to handle cash. |
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Gift cards encourage repeat visits. Gift cards encourage customers to visit your store at least once to redeem their cards. If they don't spend the total amount, you can expect them to return to your store as many times as it takes to spend the value of the card. Customers often spend more than the value of the card.
"Gift cards are the perfect gift every time," says Jerry Rotondaro, President of Preferred One Integrated Market-ing Services, a company that specializes in marketing
gift cards.
It's easy to start a gift card program
Many gift card programs tie into POS systems and many POS providers offer gift card services. Talk to your POS provider about what options are available for your store.
Other groups like Chase Paymentech, Givex and Eigen Development sell gift card programs that retailers can use through their POS terminals.
Gift cards programs vary in cost, depending on how many gift cards you purchase. Budgeting $600 for an initial investment is probably a good idea. Depending on the vendor you choose, $600 will pay for the set-up and design and printing of several hundred cards, in addition to the counter display and the behind-the-cash programming required to ready your POS for gift card purchases.
Ask your payment processor and gift card vendor about swipe charges. Some levy a fee for each gift card transaction. Others charge a set monthly fee for operating a gift card program. Find out what payment works best for your store and factor the costs into your budget. |
