Gift Card Shopping Tips

Shopping for a gift card program can be a task, however we hope to make it easier for you. Today there are many so many gift card companies "popping up everywhere", it may be hard to "weed through" all of them and find the right one that will best meet your requirements. Perhaps knowing what questions to ask may help you better qualify which vendor is a match, so you can make an educated decision.

POS Equipment: Can I use your gift card program on my present credit card processing terminal? If so, would I be required to switch credit card processors? If I cannot use my present terminal, what terminal am I required to purchase? What is the cash price of the terminal? What is the lease price of the terminal? This is an important question because many gift card companies are really credit card processing companies that use a gift card program as "lost leader" to get your credit card processing business or to buy a new terminal the old "Bait and Switch" routine. If you're happy with your processor, or don't need expensive new equipment, why risk switching?

Fees: What are my one time fees? Is there a setup fee, reprogramming fee, application fee, artwork fee or per location fee? Are there any other one time fees? What are my card costs? Where are my price breaks?What are my transaction fees? Where are the price breaks? Are there any on going monthly fees, if so what are they?

Cards: What type of cards are they? (i.e. styrene or PVC) What weight are they? Is the printing on the cards laminated or a true surface printed four color process? This is another important question to ask because many companies reduce card costs by cutting quality. The investment you make into your cards should be with quality in mind. Remember, gift cards are your "billboard in a wallet", and if the ink scratches off and your advertising looks shoddy, it is not a good investment. Also, it is important to find out if the gift card company "farms out" its printing to another printer or is a true end to end provider with their own print shop. We have heard horror stories of gift card companies that have no control over the printing or encoding of the mag stripes, and the failure ratios of such programs.

Cost Analysis: Remember, a high card cost and low transaction fee, or a low card cost and a high transaction fee both have to be evaluated specific to your situation. The same thing goes with a program that offers no transaction fees. A general rule of thumb is that gift cards are used an average of 2.5 times each. So if you are quoted a card cost of $1.50 and a transaction fee of $.15, the true cost to use it 2.5 times is $.38 + $1.50 or $1.88 per card. If the card cost is $.65 and a transaction fee is $.30 your true cost per card would be $1.40 per card. The flat rate plan also has to be evaluated. What is the monthly charge? How many transactions would it take to offset the monthly fee?

Company information: Taking into consideration that gift card programs are relatively new, most gift card representatives may not have a tremendous account base yet. This is not really the problem. In today's marketplace gift card companies are already coming and going. The real question is are you dealing with the source, or a third party. So ask these questions. Are you a third party provider that private labels (brands) your name on someone else's gift card program? Will you be the company responsible for billing me? If you represent someone else's program and you are billing me, what happens if you go out of business? How long have you been in business? How long have you been selling gift card programs. Who are your customers? Are you a "reseller?"

Reporting and reconciliation: Do you have real time Internet reporting? Can I download my gift card activity into a spreadsheet program? Who owns my data if you store it on your network? If I want to go to another gift card company, will you provide me my transaction data? Very important questions to ask in the event that you want to move your business somewhere else if you are unsatisfied with your gift card provider. Because credit card companies see gift cards as a "retention tool" for their potential customers, you should consider what the option would be if you are unhappy.

Fraud control: Can a management code be the only way for cards to be activated, or at least an employee code be required? Are the cards sequentially numbered or randomly encoded? Sequential encoding of gift cards is a fraud risk waiting to happen.

Other Services: What other services do you provide? Can I track (register) specific customers and their card usage? Use customer demographics for mailings? Can cards be personalized if needed?

Lastly, remember it takes 3-5 business days after we get your artwork, to provide you with a proof. Once you approve your proof, it takes three weeks to get your new gift cards. That's a 30 day window to account for no matter who you do business with. The closer it is to any major holiday (i.e. Mothers Day, Father's Day, Halloween, Thanksgiving, Christmas,) the longer it can take to produce your cards, due to the demand. The point is....please plan ahead! If you want to take gift cards for the holiday season...start marketing them now! Take into consideration the time you need to properly market your program. It's never to early, and avoid the holiday rush and start earning revenue for your company.

We hope this helps you evaluate a Gift Card program that best suits your needs. Not all gift card programs are created equal. The initial investment is only part of a long time partnership with whatever company you choose. The last question is one that you may want to ask yourself (perhaps it should be the first): What is most important to you in choosing a Gift Card provider? GiftCard Technologies is confident that depth of product offering, experience, quality, and service are at the top of your list.