Types of electronic gift card programs
The most common use of a gift card is also the simplest – providing a fixed or customer-determined dollar value on an electronic card. Some businesses incorporate gift cards into larger marketing efforts. They create thousands of gift cards containing small dollar amounts – usually $1 to $3 each – and distribute them to customers via direct mail or hand them out in stores. Studies indicate these cards are redeemed at a higher rate than similar printed coupons and they also help promote your business.
You can implement a number of different programs for your electronic gift card system depending on what you want to offer. Options include:
- Loyalty cards – one of the more prominent alternative uses of gift cards. They reward both frequent and occasional shoppers with a "points for dollars" system. Once customers complete a membership form, every purchase they make earns credits that can be used towards future purchases. Many retailers also use that membership information to enroll their loyalty members in a promotional program that delivers coupons and discounts via mail, e-mail, or social media, encouraging future spending while continuously keeping their brand in front of the consumer.
- Membership cards – a variation of loyalty cards, this program rewards customers with exclusive discounts and special offers just for doing their regular shopping. Each time a card is scanned for a loyalty program, the database tracks the items that customer buys. Businesses use this information to create detailed demographic analyses to market more efficiently to customers, and to help determine how to stock their shelves.
- Merchandise credit has also become a popular solution for returns without receipt or those that have exceeded the return period. Similar to any other gift card, merchandise cards, also known as store credit, enable you to keep the value of returned items in-house while at the same time distributing marketing material to your customers.
Multiple programs, same card
Electronic gift cards are capable of managing multiple programs at once. For example, a monetary gift card can also be programmed to work as a loyalty card. With different programs on the same card, the customer has a reason to keep the card instead of throwing it away once the funds are depleted. Setting up multiple programs on a single card also saves you money since you only need to pay a single transaction fee to activate the card.