How to Set up the Right Gift Card Program
by: AlDuggan |
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You've thought about it and realized that it is finally time to add gift cards to your business -- a smart decision. As you sit down to begin the search for a supplier, you quickly realize that there is a lot to consider. How do you go about making a choice that's the right fit for your business? With several areas to consider, it's best to break the decision-making process into a few, specific areas. Asking a few key questions can help you make the proper selection.
Where's the best place start?
An obvious, but excellent question. You have probably taken a few calls from various sales reps, including the Independent Sales Organization or "ISO" representatives. They offer you a host of business services -- things like credit card terminals, check/credit acceptance, payroll solutions and even loyalty/gift card services. Perhaps, you've contacted a few gift card companies after doing a search online and going to their sites. You've listened to the sales presentations, but how do you know which of these is the best gift card provider for your business?
Start by asking some basic questions directed to your ISO rep or prospective gift card vendor. Determine which gift card supplier (or suppliers) your ISO represents and do some research on them. Many companies offer a gift card product in addition to several other financial products. Others only focus on gift and loyalty products and programs. Companies that offer gift card programs exclusively are often better-equipped from a service standpoint to assist merchants in creating the right program that aligns with their goals and business size.
Look closer. Ask whether they are using a proprietary gift card system and platform or whether they are licensing a system from someone else. Ask them what their stated uptime is. (It can be aggravating to have a system go down for some technical issue right when you are trying to process or sell a card to a customer.) Ask what kind of customer service program is in place. Is their phone support available on their dime? How about email? Is there an all-hours, all-days service coverage in place if a problem comes up?
Now, let's dig a little further. Let's look at the types of plans they have available for transaction processing. Some will bill you "per transaction," with limited or no monthly fees attached. Here, the business is charged a minimal fee when a card gets activated, when a card is redeemed, when value is added to a card, or if a customer queries the card to find out the balance. Others offer simpler "flat-fee" schedules that combine all card activity for the program into one fee per month, which covers a sizeable group of transactions. To figure out which plan might be best for you, you need to try to estimate the amount of activity and card sales and then compare the different programs. This is one of the areas an experienced card supplier can help you to tailor a plan to your needs.
When your gift card program is up and running, you will want to know how successful it's doing. Your gift card supplier will provide you with various activity reports. Try to get an idea about what types of reports are available and how easily accessed they will be. The more reports that will be offered to you, the more you will be able to track results. At first, some of it may seem complicated when you begin, but you will quickly develop an understanding for some of these. The more reports you have available, the more sophisticated that understanding can be.
How about the Equipment or Hardware?
Gift cards use software applications that are integrated into the various terminals and Point-Of-Sale systems. Something not to overlook is how compatible the gift card system is with your own transaction processing system. Will it work with your current terminals? How smoothly will it be integrated into your Point-of-Sale system? To be sure that your system is compatible, get the details. Also, you may also find out something about the level of sophistication and market strength the gift card supplier has by learning how many different terminals and systems they can work with.
Gift Card Design
Now comes the emotional part - choosing your card. You have a number of choices here but the first decision you'll need to make is "standard or custom?" Standard cards are designed by the gift card company and are often available for specific markets and targeted holiday buying events. The advantage to standard cards is speed-to-market. Since the cards are already designed and printed, they can be personalized for your business by adding your business name and other text (some companies can even print your logo on standard cards) and you can be selling gift cards within a week. The key is to choose a gift card company that offers a standard card design that appeals to you. Larger companies offer tools on their websites that let merchants not only check out their standard card designs, but try out different typestyles and colors for the personalization on their chosen design before they commit to a card.
The alternative to standard cards is a custom design specifically for your business. Although custom cards are often more expensive and can take longer to produce, the payoff is a unique card that reflects your business' identity and personality. Custom cards help merchants brand themselves and contribute to a coordinated marketing approach. If you choose to create a custom card, ask about your gift card supplier's graphic design capabilities. Some companies have a staff of designers who will create a quality card design for you at a reasonable cost. Ask about how designs are proofed - many offer web or email-based proofing that makes it easy to approve your design quickly.
A Few Final Questions to Consider
Rather than stop with card design, find out what additional merchandising tools are available. Some card suppliers will have an array of card carriers and hangers, display racks, posters, signage and envelopes that will help you drive awareness and sales. Presentation at the place or point of purchase can dramatically boost card sales...and profit for you. Some suppliers can also provide you with various gift card presentation products that you can sell along with your gift cards.
Finally, it's good to look into how a gift card supplier communicates with its clients and merchants. The gift card business is growing and changing. If you partner with a company that can keep you knowledgeable on the latest tips, techniques and trends, you can learn a lot and increase sales. So, find out whether they offer various newsletters and email-based notifications to keep you up to date on tips, services and new products.
Bringing in a gift or loyalty program will likely be a very good decision for your business. But once you start processing cards with your chosen partner, it can be difficult to convert your program to another supplier. Take some time before you make your choice to ask the right questions. Choosing the appropriate vendor will ensure your new program operates exactly as you hope and expect it will.
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About the Author
Al Duggan is an expert in building a gift card program and is the VP of Business Development for Valutec Card Solutions, LLC, a Metavante (NYSE:MV) company, the nation's largest provider of plastic gift cards to small to mid-sized businesses.
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