| The History of Gift Cards | | | | software, you are able to take full advantage of this |
| Whoever created the idea of gift certificates was a | | | | powerful marketing tool. |
| marketing genius. The idea of taking someones money | | | | The gift cards should have your logo on them for |
| (which is valid anywhere) and giving them a certificate | | | | advertising purposes. They also may be packaged for |
| redeemable only at your restaurant was a pure stroke | | | | a nicer gift presentation. Some companies have even |
| of brilliance. It made gift giving easy and guaranteed | | | | worked out reciprocal programs with other |
| the restaurant profits either through redeemed or lost | | | | non-competitive companies to display gift cards at |
| certificates. | | | | each others business. |
| The problem with paper gift certificates was that they | | | | The cards have no value until sold, thereby eliminating |
| took time to issue, track and redeem. Usually, the | | | | the problem of theft, forgery and redemption of stolen |
| certificates were kept in a secure place and access | | | | certificates. |
| was restricted to only a very few. If a certificate were | | | | The cards are reusable once fully redeemed. The |
| sold, it took time to issue and interrupted the manager | | | | customer may also add to the balance, thus creating |
| owner to issue the certificate. | | | | your very own debit card system with frequent diners |
| Tracking the certificates, which were usually | | | | being able to continue to use/reuse their card on future |
| sequentially numbered was critical as gift certificates | | | | visits. This have become huge in coffee shops where |
| could be stolen, forged and then redeemed thus | | | | customers use their cards on a daily basis to make |
| creating a loss rather than additional profits. It was | | | | purchases. |
| because of these problems that many restaurants | | | | Some point of sale products keeps the balances at |
| stayed away from gift certificates and thus missed | | | | the store level for single store operators. There is no |
| out on some huge marketing opportunities. | | | | need to process the gift card outside the store as |
| In recent years magnetic cards have taken the place | | | | balances are adjusted up or down at the end of the |
| of paper certificates. Balances were kept in a | | | | transaction. There are no transaction fees with this |
| database, which were linked to the card via a number | | | | type of data storage. |
| in the magnetic stripe. Some credit card companies | | | | For multiple store operators a few point of sale |
| have jumped onto this bandwagon offering gift card | | | | products have the ability to house gift card balances at |
| programs that act similar to a credit card. The | | | | a central location with every store accessing and |
| balances are kept off site at the credit card processor. | | | | updating gift card balances through high-speed internet |
| The processor then charges a transaction fee to add | | | | connections. Even though the balances are being kept |
| to/redeem the gift card. This fee can run between $.15 | | | | off-site there are still no transaction fees with our |
| - $35 per swipe of the card. On small card | | | | system. |
| transactions such as coffee houses these fees gouge | | | | The Benefit of Gift Cards To You |
| deep into the profits of the sale. | | | | The potential for huge profits, additional sales and |
| A newer trend is to house the gift card balances at | | | | repeat customers are the overwhelming reasons to |
| the store level. There is no transaction fee and virtually | | | | sell gift cards. Being able to private label the cards, add |
| no time lost processing the transaction outside of the | | | | to balances and create your own debit card system |
| store. Any amount may be added to the balance of | | | | make using magnetic cards for gift cards essential to |
| the card, thereby making the card reusable and not | | | | a profitable restaurant operation. |
| disposable. Your logo is on the card, making it a | | | | Abandoned cards are also a huge area of realized |
| constant reminder of your restaurant every time the | | | | profits. When balances get below $1.00 the system still |
| customer looks in their wallet. | | | | recognizes them as active. However, customers tend |
| The Need for Gift Cards | | | | to abandon their cards if the balances get below a |
| Restaurants need the ability to securely sell, track and | | | | certain amount. For some larger companies these |
| redeem gift card transactions without transaction fees. | | | | abandoned balances along with lost cards equal |
| Balances should be kept in-house. The customer | | | | millions of dollars per year in profits. |
| should be able to add to their balance at any time, | | | | DirecTouch Point of Sale also allows you to set |
| making the gift card like your own private debit card | | | | expiration dates on the cards issued. This helps create |
| system. | | | | a sense of urgency for your customers to come back |
| The cards should be reusable and they should have | | | | to redeem the cards. |
| your logo on them for a constant reminder of your | | | | Some restaurateurs will use gift cards as enticements |
| restaurant. | | | | to get people to try their restaurant. Instead of writing |
| The Solution To Manage Gift Cards | | | | on the back of their business card the owner will put |
| Many point of sale products now have optional gift | | | | small balances ($5 or so) on cards and then distribute |
| card modules that tracks numbered paper certificates | | | | them to certain people to get them to try their |
| as well as issue, tracks, redeem and reports on | | | | restaurant. This is a great way to get people to come |
| magnetic gift cards. With the optional magnetic card | | | | to your restaurant and much more secure than writing |
| reader and magnetic cards properly formatted for the | | | | on the back of a business card. |