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Guide to gift cards for small businesses

How to Implement Gift Cards for Small Businesses

A complete guide to start selling custom gift cards for small businesses, and how to get gift cards to work for you.

Offering and selling custom gift cards to your customers is all about growing your customer base, increasing your sales, and building relationships and customer loyalty. – So how do you get started, and if you haven’t already, how do you implement a new gift card program for your store and small business?

What's in this Guide?


Why personalized gift cards is an absolute must for any small business.

1. Growing your customer base.

Nothing brings in new business, like new gift card receivers, that may have never visited your store otherwise. And with custom gift cards being the number one selling gift product, especially in the holiday season, according to many studies. This is a sure way for your small business to grow your overall customer base.

2. Increasing your sales.

The same study done by First Data also concluded that the majority of gift card recipients, actually 72% of them will end up spending 20% more then the gift cards total value. While 10% to 18% will never use their gift card at all, leaving your business to collect all these new profits, generated simply by offering gift cards to your customers.

3. Building relationships and customer loyalty.

When you offer your customers the option of re-loadable gift cards, along with a rewards program, that by itself will keep your customers coming back and feel a sense of loyalty to your business. It’s that simple. There is obviously a lot more benefits for any small business that offers personalized gift cards to their customers. The reasons above however, should hopefully be enough to get you excited to start thinking about implementing your own gift card program.

So how do you get started with your own gift card program?

1. Set up your POS system (if you haven’t already)

Your businesses ‘point of sale’ system (aka POS) is what you use in your retail store to ring up sales, take credit card payments, and it’s the software inside your POS that is the brain of your operations, and what keeps track of your entire business, from orders placed to your stock inventory.

A POS system is usually a combination of hardware and software for retail stores, with the hardware being the barcode scanners or the magnetic stripe card readers. – eCommerce-based businesses also employ a point of sale system that is usually more software only based, but the functioning of it being the same.

Chances are that you already have a POS system in place – Think about your credit card processing terminal you use to swipe your customers credit cards – But if you don’t, a good place to start looking for one is usually your existing merchant provider and credit card processor.

Once you have your POS system ready, and you are all set to accept credit card, now it’s time to make sure you add a Gift Card module to it, this will allow your software to also sell and accept gift cards as an additional form of payment.

Closed Loop VS Open Loop

- Closed Loop
Keep your customers coming back, by making sure you are setting up a ‘closed loop’ gift card program, so that the gift cards you will be offering, will be tied and redeemable at your business only. - A Startbucks gift card is a good example, as you can only use it within the Starbucks network of stores. – A closed loop program also allows you to fully customize your gift cards, with your artwork and promotions.

- Open Loop
Open Loop cards are gift cards that are issued by major credit card providers such as Visa or Amex, and while they may be branded with your logo, your branding options are usually limited, and recipients can use those gift card virtually anywhere Visa and Amex are accepted. Which defeats the whole purpose of building customer loyalty, and reaping the rewards of a solid gift card program.

2. Order custom GIFT CARDS that work with your POS

Now that you have the tools in place, its time for your small business to order personalized gift cards that will work with your point of sale system. - Start by visiting our custom gift cards order page. - The order form on this page, offers you all the different specs used by any POS system.

Both, mag-stripe gift cards or barcode gift cards, will need to be encoded, giving each gift card a unique account number. This allows your POS software to recognize each gift card, simply by reading the card’s number encoded. – The POS software database will then access the card data, to see unredeemed value, rewards balances or to apply other discounts, and this how your small business is able to utilize the use of gift cards, and one more way for you to compete with national larger brands.

Gift Card Laws

As is the case with everything consumer related, back in 2009-2010, Congress signed into law the Credit Card Accountability Responsibility and Disclosure Act – or also known as the CARD act. – with its main purpose, to protect the consumer when it comes to credit and gift card issues.

Here are some of the basic legislation that small businesses should be aware of. – These rules and laws do not apply to gift cards created for a specific event only, or for gift cards offered as a promotion, much like the free Amazon gift card offered by PlasCards.com

  • Expiration - A gift card sold, cannot expire before 5 years from date of activation. And if you choose to add an expiry date to the card, it must be clearly displayed and cannot be less than five years.
  • Fees – You cannot charge inactivity fees for the first 12 months of card activation. And after the first year, only one fee per month, and only if it was disclosed before the card was purchased.
  • Replacement – You must provide a replacement gift card to any card expired with funds still attached to it.
A good resource on state by state gift card regulations can be found at NCSL.org

Summary:

The benefits of any small business offering custom gift cards to their customers, are obviously enormous, and only growing each year. It brings in new business, increases your bottom line, and very quickly returns the money on your investment like no other marketing can do. – Our staff at PlasCards.com is here to help and guide you through the process of implementing a gift card program for your business. – We will also send you free test cards, and free card samples, to make sure our gift cards work smoothly with your POS software.