Nearly every merchant has heard that gift cards help them get more business. Now the consumer has gotten the message and gift cards are one of the most common gifts purchased. So, the merchants will want to be offering them; we'll sell them add on services, and we will get rich on the extra transactions, right? Not so fast. The problem is that merchants have different expectations for those gift cards.

A gift card that a merchant offers can be of a number of different types. For example, one merchant may want to offer a card that can only be used at that establishment. Another merchant may want to offer a card that can be used only within the store chain. A shopping mall wants one that can only be used within that mall. Another merchant may want to offer a card that can be used anywhere. Each of these types requires different sales and support.

For example, a moving company wanted to offer an electronic gift card simply as a way of providing credit and refunds without giving cash to the customer. The owner did not want to have their employees opening the cash drawer and handing cash to the customer. Now, a moving company does not expect the customer to come back and so restricting the value to only that establishment is not a good value to their customer. In this case, a prepaid bank card is a better solution. To be able to offer that, the gift card vendor has to have invested a certain level of capital, training, and technology.

Another store wanted to offer electronic gift cards because they wanted to have the money come back to the store. They wanted the cards to look unique so that the cards would not be mixed up with other store cards. Yet, they are not big enough to buy thousands and thousands of cards.

In this case, having a card that can be printed in small quantities with custom art work is the way to go. For many ISO's, that type of customer is going to be expensive to setup and expensive to maintain. The customer really would like to have a solutions that does not generate any transactions (an in-house solution). To offer this, the gift card company would need to be small, agile, and low cost.

Another type of customer is the restaurant chain. Again, here we are talking about a customer who wants custom art work, custom restraints on how the cards are denominated and other restrictions and reporting requirements. There is one type of report that goes to the restaurant manager and another that goes to corporate. Being able to respond quickly to the chain demands is what will make this customer happy. To be able to offer this, the gift card vendor has to have the sale support people and some technical people on staff.

There are several companies that sell gift card services to the ISO's and there are complaints about all of them. The reason is that the field is more complicated than just "sell the merchant and reap the transactions". There are a number of different needs that the merchants are trying to fill. Meeting those needs requires personal interaction with the merchant and flexibility in the product. Each type of merchant may need a different type of gift card provider and different type of people standing behind the card.

In short, the gift card business is a people business more than just a technology business. We can provide the technology. If you want to be in the gift card business, you will need to provide the sales, training, and support. Give us a call for the technology.

Dave Randolph,
President, Prairie Trail Software
1-800-618-4199

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