Gift cards continue to grow leaps and bounds allowing retailers which have implemented a program for their stores to reap vast benefits. In fact, total shelling Chipotle Gift Card Balance Check out for gift cards in 2012 nearly reached $30 billion with around two-thirds of all American consumers having purchased a minumum of one gift card.

It is mainstream and it’s really not for the holidays anymore. While nearly 2/3rds of all consumers have purchased gift cards for someone round the holidays, over 80% of most consumers have purchased a gift card as a birthday gift. No more should retailers simply rely on the holidays for his or her sales – though sales at this time are concentrated – the sales can be found throughout the year.

Gift cards are convenient, secure, and act as a branded “billboard in a wallet”. In multi-unit retail outlets, they keep carefully the money within the store network sufficient reason for gift cards, retailers will gain more name recognition and exposure in the marketplace, further widening its existing customer base. To further the case, it’s not just for the brand awareness, it increases the top line because the average gift card user ends up spending a supplementary 20% beyond the value of the card.

Why Gift Cards? Some retailers may still use punch cards or paper certificates and while these programs may have advanced their loyalty program up to now, plastic gift cards outsells paper certificates from 2 to 10 times as much. The electronic concept is among the most medium of preference for retailers and merchants in the united states. On the list of significant reasons are:

No Cash Back – the worthiness remaining after partial redemption stays on the card ensuring additional opportunities to solidify the guest relationship.
REAL-TIME Processing – virtually eliminates both losses connected with paper gift certificates and costly tracking and accounting.
Offering a gift card is quite similar to supplying a new product item – without needing to learn complicated handling procedures, training procedures, and tie up valuable space for storage. It will help gain clients – friends or associates of one’s existing customers – and the card program should be viewed as a revenue generator.

Logistics: A processing terminal is needed to run the gift card program. Usually your credit card company can help you choose a terminal that will fit the bill and budget. Most gift cards work with a host-based computer system to store the worthiness of the cards as they are sold and redeemed. Simply load and redeem the cards with a credit card terminal that accesses the host computer. This host-based system enables the gift card to be sold and redeemed at all participating locations (if applicable for multi-unit operations). Here’s generally how it operates:

Activation
Consumer purchases the gift card for any amount using cash or charge card – the clerk executes the sale via normal payment procedures on the register
Level of the “gift value” is loaded and stored on the host database by swiping a magnetic strip card through a credit card terminal
Customer receipt shows balance on card – updated in real time
The card could be reloaded and may be utilized multiple times

Redemption
Swiped through charge card terminal for host authorization
No cash back – customer receipt shows real-time card balance
Pooling: For multi-unit operations, as your cards are redeemed within other participating stores along with other stores’ cards are redeemed within your store, the redemption amount is transferred at a specified time electronically. That is called pooling. All transactions are accounted for electronically in the database and activity reports. All pooling activity is documented, itemized by card having an overall summary and redemption amounts are transferred between locations via the Automated Clearing House (ACH) network from each location. The ACH network is the same system banks use to move money as regulated by the Federal Reserve. All activity is recorded electronically on the terminal and host computer with time and date stamp for audit purposes. A terminal gift card batch report itemizes transactions for reconciliation.
Marketing & Merchandising: With suggestive selling and merchandising, the gift card will create additional revenue. The demand is strong year-round, especially at the various holiday times over summer and winter. Birthdays are the hottest reason to buy a gift card – each day is someone’s birthday! Similar to activation, the cardholder can purchase additional value or “reload” the card for just about any amount at any participating location. That is ideal for regular guests. The gift card could also be used internally for credits. For instance, in lieu of cash return on a purchase return or perhaps a customer complaint, you can issue a card for the worthiness of the credit. This keeps the purchase money in the retailers network.

Loyalty Programs: A loyalty card program uses the same host-based computer system to store the value of the loyalty cards as the gift card. You can load and redeem the cards with a credit card terminal just like the gift card with the only difference being you could only add/redeem points to a loyalty card, not dollars. Much like the gift card, the loyalty card earns points and is redeemable at all participating locations. An average loyalty program works something similar to this:

Enrollment – Consumer enrolls by completing a loyalty application.
Staff reviews for eligibility and ensures the loyalty card number is recorded on the application.
Consumers will earn X point per $ spent when they initially enroll and ongoing.