Gone are the days when businesses offered gift cards to their customers and clients which were not reusable. They were also difficult to track. Today, everyone is familiar with its credit card-sized alternative, a reloadable Universal gift card. They are a universally preferred option across Australia, with customers opting to purchase them every year. Gift cards are an excellent way to encourage additional purchases. Reports show that a typical customer revisited the store three or more times with a gift card than without, as it provided them with the advantage of redeeming the amount. It is beneficial for a business as customers end up spending more than the value of the gift card, generally over 20%. Therefore, these gift cards don’t just encourage sales but encourage larger scales that benefit stores.
Types of Gift Cards Available
Primarily, there are two kinds of gift cards. One is the closed-loop one, and the other is an open loop. People can use closed-loop gift cards only at particular stores. Open looped gift card, like a universal gift card, usually has a credit card network like Visa or Mastercard as a co-brand. It allows customers to use the gift card in any store that accepts visa cards. The businesses can offer either the closed-loop or the open-loop cards based on their marketing and sales strategies.
Along with these cards, many retailers also distribute digital gift cards or e-gift cards with a code, enabling the customer to use them on e-commerce platforms. In the current age where over 82% of Australians engage in e-commerce purchases, businesses should have digital gift cards as an option despite having a brick-and-mortar store location. However, they need to ensure the security of the card access and its transactions.
Starting a Universal or Specific Gift Card Program For the Business
Beginning a gift card program for a business can seem intimidating, especially if they need to set up the entire transaction chain themselves. However, numerous services help make the process easy and convenient. The two most common options for them to set up a gift card option are through a “universal” gift card service or a credit card processer.
Through the Credit Card Processor
Those who accept credit cards can contact their processors for information about various gift card programs they offer. Generally, these processors provide close looped gift cards for businesses that customers can only redeem in the franchise. Numerous processing companies offer these businesses choices for pre-designed gift cards they can insert their brand name into or customize according to the brand itself. Some companies additionally provide racks to draw the customer’s attention and promote sales. By going through a processor, franchisees can set up and run their gift card program within a few days. However, the companies might require prior notice for higher bulk orders during the peak season like Christmas, Australia Day or New Year’s Day.
Through Universal Gift Cards
If the business’s credit card processor does not offer gift card options, or if they prefer to opt for an unaffiliated gift card service, they can opt for Universal gift card programs. These programs provide a similar option as the processor. The businesses can check which card is compatible with their credit card machines and commit to a program that works best for them. These cards provide more flexibility on the card, design choices, transactions and other factors that enhance customer satisfaction. Additionally, businesses need not worry about starting a new gift card program if they plan to switch processors in the future.
