|Everyone is familiar with the traditional mode of paper-based retail gift certificates. But electronic gift cards are quickly becoming popular with retailers everywhere.
Electronic delivery of gift cards provides a number of significant advantages over their paper-based alternative. They eliminate the cost of paper and associated printing & labor costs, substantially reduce the risk of fraud and are much easier to track and monitor. Also, if a customer spends less the full gift certificate amount, the excess is not lost. You do not have to provide the customer with the excess in cash – rather, it remains available to the customer on his card, thereby prompting future sales and offering an incentive for the customer to reload the gift card.
Electronic gift card programs are easy to use:
- Your customer purchases the gift card, using cash or any other method your business accepts.
- The gift card is activated by being swiped in a POS retail terminal.
- Your cashier then inputs the purchased amount onto the gift card (called the ‘load value’).
- Both the customer and the cashier receive a receipt.
- Thereafter, the customer utilizes the loaded card (up to its loaded value) when he buys your goods or services.
- Your cashier checks the status and dollar amount of the card on-line (via the card’s magnetic stripe).
- The card is then swiped by your cashier through the POS equipment and inputs the amount of the purchase.
- A receipt is printed, containing the purchase data together with the balance that is still available on the card.
- The balance can also be viewed through the point-of-sale terminal.
A few of the available features of an electronic gift card program usually include:
- Card history reports for each gift card detailing each customer’s purchasing behavior.
- Merchant’s reports include purchases, activations and de-activations.
- You can access reports online, for both individual and total transactions, including date, time, transaction type and amount.
- Programs are usually completely customizable to the merchant’s needs.
- Fraud controls built-in.
- Both rechargeable and static cards are usually offered.
And the benefits of electronic gift card programs are numerous:
- Gift card customers usually return to your store & generate new sales, spending 40% more than the card’s face value.
- Typically 20% of gift card holders do not spend the card’s full value – the remaining balance goes to your bottom line.
- Customized cards displaying your store’s branding have higher perceived value than paper certificates.
- Gift cards can be used when a customer makes a return. Dollars remain on the card, where the customer can use them for future purchases from you.
- They offer more security than paper gift certificates, as they are not easily copied and are of no value until activated by your employees at the time of purchase.
- Manual handling and tracking of paper certificates (and the associated costs) is eliminated.
- Assists in maximizing other promotional and loyalty programs.
- Gift cards serve as an ongoing advertisement in your customer’s wallet.
- For your customers, electronic gift cards offer more convenience than paper gift certificates (no more paper to fold and carry) as well as more flexibility in the goods or services they can use them for.