Bank Associates Merchant Services

What is a gift card?

A gift card is a stored value card that can be activated with dollar amounts starting at little as a penny and all the way up to $9,999.99. Generally the default maximum dollar amount is $500. Gift cards are re-loadable, enabling them to be reused. Gift cards can be given as gifts or used as marketing tools to build customer loyalty.

How do they work?

First, a consumer buys a gift card with cash, check, credit or debit cards for a designated amount. The merchant then activates the gift card for the dollar amount chosen. The recipient then redeems their gift card value towards products or services.

Why offer a gift card program to your customers?

Consumers spend more with gift cards:

• 18% of online consumers said that they plan to spend more on gift cards in 2007, compared with in 2006. This number will undoubtedly grow throughout 2008*
• 77% of gift card recipients reported spending more than the initial value of their gift card with an average increase of $39*
• 78% of consumers have purchased or received gift cards in the past 12 months*
• The average gift card buyer has purchased 4.7 cards in the past 12 months*

Enhance your brand:

• Connect with your consumers and build your brand awareness while at the same time earning guaranteed money whether the gift card is redeemed or not
• A gift card recipient is receiving a positive endorsement of your business from the card purchaser
• Pre-paid dollars make your business the destination for the recipient
  
• Gift cards attract new customers

Keep profits in-house:

• Some merchants opt to use "store credit" via gift cards for merchandise returns
• Balance on activated cards is held by the merchant if/when they are redeemed
• Gift cards reduce fraud and is inexpensive to accept as a form of payment

Ease of use:

• Magnetic swipe technology is compatible with most terminals
• Gift card POS applications require a short set of simple commands, requiring little employee training
• Transaction fees are lower than interchange charged for credit card purchases

Fraud Protection:

• Gift cards have greater protection and are activated through a POS transaction versus paper certificates
• Card balances are maintained on a remote host for security

Streamlined implementation:

• Simple sign-up forms
• Different programs are available to suit merchants of any size
• Launch your gift card program within weeks!

*Source: First Data U.S. Gift Card Consumer Insights Survey, 2006