Tag Archives: gift card

Loyalty Card Processing

Loyalty Card Processing [2023 Update]

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Loyalty cards are an important part of modern business when it comes to payment processing. As e-business becomes more prolific and consumers have more options available, it becomes vital to retain repeat customers. Attracting new customers is just as important. Perks go a long way to doing both. Loyalty card processing can provide coupons, gift cards, discounts, and other features. Things that make customers want to come back for more business.

Attracting and retaining customers can be difficult without simply cutting prices – not always an option in an increasingly hostile economy. Loyalty cards and gift cards drive customers to return to your place of business without cutting into your bottom line. Consumers are more likely to return with a loyalty card in hand than they are without one. Why? They help build relationships with your target demographic. People feel appreciated when their business is rewarded, which in turn drives sales. Strengthening customer loyalty is the key to keeping them coming in your door instead of going to your competition.

Loyalty cards also allow you to step into the arena of targeted marketing. Every sale your customers make with your loyalty card enables the collection of data – what sorts of people buy what sorts of products, for instance. This knowledge can be invaluable. Even a little insight into your customers’ habits can enable you fill their needs better.

In addition to the obvious benefit of repeat business, loyalty cards also encourage increased spending. Most loyalty programs are dependent on a percentage of sales; e.g., after a certain dollar-value of money is spent, a reward is given. Even in the case of direct discounts (such as a card that saves cardholders 5% each visit), greater savings are observed as more money is spent. It’s a great way to encourage your customers to spend more with you.

Gift cards are another great device for boosting sales. Panicked gift-buyers know one thing – they want to leave your business with a gift, even if they aren’t sure what they want. Gift cards are a great answer to the problem and they safeguard that an unsure customer won’t walk away from your business empty-handed. Gift cards also provide immediate cash flow up front. Each card purchased is money in your pocket, and peace of mind for your customers.

Even after purchase, gift cards can help drive sales. Since they are usually given – as the name implies – as gifts, they bring new customers to your business (and another chance to sell your loyalty card). Most consumers who use gift cards spend more than the value of the card. This translates into more profit for your business.

We live in a digital age. Loyalty card processing and gift card processing are facts of life for modern businesses. Enhancing your point-of-sale transactions with profit-boosting electronic features is important to stay competitive. Attracting consumers with gift cards and keeping them with loyalty programs are cheap, effective ways of boosting your business.

Merchant Services: Why Should You Offer Gift Cards?

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Today The Official Merchant Services Blog continues its ongoing series to get you ready for the Holiday Shopping Season. A previous blog entry looked at the next big thing, virtual gift cards. But we figured we’d take a moment to focus on the old school mainstay, and offer insight into why merchants should offer their customers regular old plastic gift cards.

The Numbers Are Telling

Getting the obvious out of the way first: Gift Cards, Gift Certificates and Loyalty Programs are big business. According to one report, businesses sold $23 billion in gift cards in the U.S. in 2010.  The consumer perspective is pretty straight forward: they are convenient for both the shopper and the recipient of the card. This blog article here goes into detail about why they are convenient and popular with shoppers.

But what about your business? Why would gift cards and loyalty programs be good for your business?

Here’s a rundown on some of the most prominent reasons to start running a loyalty program and offering gift cards:

Increase in Sales

You’re about to see a lot of new foot traffic (or click traffic if you’re reading this from an e-commerce perspective). And a gift card program will heighten the sales potential you have this Holiday Shopping Season. From impulse buys to people who just aren’t quite sure if the person they’re shopping for has a particular item, the gift card steps in and provides more chances for consumers to purchase something from your store.

Getting Sales Referrals

Gift Cards take two to tango. The person buying the card, and the person receiving the card, are both potential long-term customers for your business. It could be that the person buying the card knows the recipient likes your store but doesn’t know what specifically to buy from you for them. Or it could be the other way around, and the gift giver likes your business and wants to introduce the recipient to your goods or services. The real power in gift cards is that they inherently refer your business beyond just one customer shopping one time.

Free Marketing Tool

A Loyalty Program and the Gift Cards you run through it are powerful forces for the marketing of your business. Building off of the previous point of the ability of the cards to refer new business, Gift Cards put your brand and your business out there for new customers and for repeat customers. A good loyalty program spreads the word about your business with each individual gift card.

Customer Retention and Business Events

You can also use Gift Cards as rewards in events or campaigns your business engages in. Or just simply use them as rewards to loyal customers. The goal of long-term customer retention is made that much easier when you have the power to give back to your customer in such a way that it keeps them coming back. The customer gets the gift card in appreciation of their business. And then comes back to you to use it for more purchases.

The Opposite of ‘Breakage’

Breakage is described in this blog about gift cards as people purchasing a gift card, and then the card not being used. It often gets touted to merchants as a way to make money on gift cards as that is money being spent on future purchases in your store that never get made. So just using straight mathematics, you make more money from breakage. You get to virtually sell items more than once. But as that blog points out, the benefits of good loyalty programs and gift cards are really focused on lowering the amount of breakage.

You want the card to get used. Why? Because people tend to spend more than the gift card is worth. It’s been reported that consumers who do use gift cards tend to spend an average of 35% more than the value of the card. Which makes a lot of sense from a consumer stand point. Gift Cards let them make purchases on expensive items they may not have initially thought were in their price range. Simply put, you have a $50 gift card to a store you like, that $100 item you had your eye on seems a lot more within reach.

You want this business. You sell more than you initially sold the card for. And you cultivate long-term relationship potential. Breakage looks good in black and white numbers, but the goal is get happy customers that keep coming back to your business.

Get Going with Gift Cards Now

Those are some of the very basic reasons why Gift Cards and Loyalty Programs can help give your business a quick boost right as we enter the Holiday Shopping frenzy. Host Merchant Services offers a robust set of services to help you process gift cards quickly and easily. The company takes the hassle out of the process with complete turn-key solutions that are focused on increasing customer loyalty for you. And we offer tiered branding customization options for the card program you select. For more information on what Host Merchant Services offers, you can click here.

Mobile Gift Cards

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The Official Merchant Services Blog continues its ongoing coverage of the upcoming holiday shopping season and how it will impact the thriving E-Commerce industry. Yesterday’s blog took a look at some of the statistics revolving around 2010’s holiday shopping profits as well as detailing a trend among online shoppers to begin their holiday shopping in the summer months. We also promised that today’s blog would show how gift cards and gift certificates were being taken a step forward.

Mobile Gift Cards

Gift Cards are going digital this year, with the onslaught of a variety of providers who will give people purchasing power of gift cards sent directly to their mobile phones. This Fox News story touts mobile gift cards as the “cool” and “sophisticated” new gift giving idea. The article cites the success of coffee giant Starbucks this year with Mobile Gift Cards, and suggests that others are following that blueprint. Starbucks had some compelling numbers to underscore the success of their mobile gift card program according to the article:

“”Within nine weeks of the national launch of mobile payment, customers paid more than 3 million times using our mobile payment application in stores and this number continues to grow at a steady rate,” says Adam Brotman, senior vice president of digital ventures for Starbucks Coffee Co.”

A mobilesyrup article features the Mobile Gift Card for apps from Toronto-based Mobiroo. And a San Francisco Chronicle article looks at Giftly and its Mobile Gift Card product. It’s a new trend that looks to make a big splash in the 2011 holiday season.

How Do They Work?

2011 Holiday Season logoThe standard way Mobile Gift Cards are designed to work is: The card is sent via email, Facebook or text. The recipient is notified that he or she has a Gift Card, and can take their smartphone into the store and use it immediately. The store clerk simply scans a bar code from the recipient’s phone, and the card is applied to the balance.

Unfortunately, as has been pointed out by Host Merchant Services in previous posts about Mobile Payments not quite taking hold in the U.S., this standard process doesn’t always work out. Many retailers are not physically equipped to handle such a process. So if the bar code can’t be scanned, Mobile Gift Cards can still be used by consumers if they print out the coupon prior to going shopping, or if they input the gift card number at a website or point-of-sale terminal.

The obvious convenience of Mobile Gift Cards is that they work seamlessly with e-commerce and online shopping. You get a coupon code on your mobile device, and then can input that number at the website where you are shopping.

Follow the Leader

The Fox News article noted that Applebee’s, California Pizza Kitchen and Target all offered Mobile Gift Card options this year. The mobilesyrup article about Mobiroo cited the old school hook of the idea, stating that “Gift cards are a symbol of a bygone time when analog ruled and retailers yielded more to foot traffic than mouse clicks. But according to Mobiroo CEO Vinay Chopra, old is new again.”

Mobiroo, according to Chopra, sees Mobile Gift Cards having quite a lot of potential in the marketplace because of smartphones themselves, specifically the apps people use and purchase for their phones. But Mobiroo is still using a physical Gift Card, with a scratch-off area that gives a code to redeem for use in an App store, and Chopra sees this as a stocking stuffer item for the holiday shopping season.

Giftly, on the other hand, is following the example set by Starbucks and others, and makes a completely digital process available. According to the San Francisco Chronicle article: “When a Giftly card is purchased, the buyer’s credit card is charged. When the recipient opens the card on their mobile phone in the store, Giftly check their location. Once Giftly confirms that the recipient is at the right venue, the gift money is unlocked.  Giftly then send the money as a credit card reimbursement to the recipient. The recipient then purchases the product at the cash register per usual. The merchant doesn’t have to be told about the Giftly — the service is completely a location-based redemption. Unlike most gift cards, Giftly allows the buyer to select up to three venues where the recipient can spend the money.”

All Giftly cards are delivered via e-mail and redeemed on a mobile phone. They allow you to send gifts unbound by location. It adds convenience to the shopping process, which is a core element that is going to make it popular with consumers. By allowing consumers to digitally forward purchasing power to friends and family wherever they happen to be, the shopping process gets that much faster and easier, making mobile gift cards an attractive option for holiday shoppers.

Tomorrow we’ll touch on a topic brought up by this blog, taking a closer look at apps as gifts in the upcoming holiday season.