The most common type of gift card program is also the simplest – a fixed or customer-determined dollar value on an electronic card. However, a gift card system allows you to implement a number of different programs to grow business, retain customers, and learn information about how customers spend their money.

One prominent gift card program is the loyalty card. Loyalty programs reward customers for their patronage, whether they are frequent or occasional shoppers. Using a “points for dollars” system, customers accumulate credits that can be used towards future purchases, similar to how frequent flyer miles work on a credit card.

Businesses like supermarkets and pharmacies that serve the same customers several times a month can offer a membership card as part of a gift card program. These cards are issued free to customers who fill out a simple application. In return, they get exclusive discounts on certain items in the store. Each time a card is scanned, the database tracks what items were sold and which sale items customers bought.

You can even set up your gift card program to issue merchandise credit for returned items. Not only does this keep funds in-house, but it also gives the customers a piece of marketing with your brand on it. The customer will return to your business to spend the money and won’t spend the cash elsewhere.
Some businesses incorporate gift card programs into all of their marketing and advertising efforts. They create thousands of gift cards in small denominations – usually $1 to $5 each – and then send them to customers via direct mail or hand them out in store. Unlike printed coupons, these cards are redeemed at a higher rate and you can take advantage of another branding opportunity.

Many businesses employ gift card systems to replace outdated paper gift certificates that need to be processed and managed by hand. A gift card system automates everything from determining the value of the card to tracking what the customer uses it for. You simply choose the design of the card and determine if the value will be a fixed dollar amount or chosen by the customer. The recipient can use the card like cash or a credit card to buy merchandise and can even maintain a balance if they don't use the full amount.

As a marketing tool, a gift card system allows you to offer discounts and rewards to customers, creating a constant reminder to come back regularly for similar bargains. Customers get an immediate payback and thank you simply for doing everyday shopping, and can earn points towards free or discounted merchandise in the future. It can also keep tabs on what the customer buys, allowing you to offer additional savings on specific items on future visits, and helping you compile valuable purchasing data across wide customer segments.

Reporting
Gift card systems detail each card's activity. They provide monthly statements with reports to track buying behavior, customer demographics, and purchasing frequency. You can then use this data to modify existing programs and create new ones.
 
Security
One of the benefits to a gift card system is security and fraud prevention for both you and your customer. The cards may include a PIN concealed by a scratch-off area on the back of the card. The card has no value until it's activated at the point of sale. Other cards feature database encryption and security audits to prevent theft and forgery. If a card is already activated and it is lost or stolen you have the ability to block or cancel it at a moment's notice.

•What will my gift card system be used for?
•Am I chasing competition or trying to offer a better overall shopping experience? Will I prefer fixed value or customer selected value gift cards?
•Do I want to enforce expiration dates on any points or dollars of a gift card?
•Do I want to design the card, or will I need the vendor to make one for me?
•Who manages my gift card system?
•What safety precautions can I take to protect customers against theft or loss?
•Will I require training to learn the software?

You can pay as little as $149 for 100 personalized cards, marketing materials, and account setup (terminal programming, account coding, Web access for program reporting, training, and help documentation.) You will also pay a monthly fee of $39 for transaction processing, reporting, and customer support.

There are more enhanced options for customized designs, additional marketing materials, and an increased supply of cards that can range from $350 on up depending upon quantity ordered.

Some service providers my offer options to pay per transaction or by flat monthly fee. These plans require monthly minimums (typically 1,000 cards) and can cost $40 per month or $10 plus an addition $0.10-$0.25 per transaction. These options let you choose a pricing structure that's right for the number of cards you will use and your expected transaction volumes. However they're a la carte: you must purchase everything separately. DIAMOND POS OFFERS THIS SERVICE FREE

You can purchase a non-PC device to activate the cards for around $400 or $29.95 per month. Software to create your gift cards, develop the program, and manage the accounts can start at $400 and up.

  •Consider reloadable cards. You pay about $2 per card so encourage customers to reuse gift cards.
  •Charitable cause. Just because you offer a points-based reward system doesn't mean they will use it.   Instead of letting those points go to waste, set it up so customers can elect to donate their points to charity.
  •Don't forsake your regulars. Even if you use gift cards to bring in new customers, don't overlook your loyal customers. Make sure to offer all rewards-based programs to the people that have frequented your business before you instituted a new plan.
  •Set up anywhere. Gift cards aren't exclusively for checkout lines and at the POS. You can offer other retailers and independent contractors a percentage of your profits by offering your cards in their stores. This will help expand your market presence beyond your locations.