Design, technology, and setup
In addition to the different types of programs, there are other points to keep in mind when developing a gift card system.
Gift card design
Most gift cards are the size of a credit card. You have two basic options for their appearance: custom designs that incorporate your logo, tagline, and similar branding material, or pre-designed templates. Don't get carried away with the design: avoid overly-elaborate patterns and busy color schemes that detract from your logo or message.
Gift card technology
There a three main types of technology used for gift card systems, some more reliable, secure and affordable than others. These include:
- Magnetic stripe cards, or magstripes, are the most common type of gift card. Magstripes work with most credit card terminals and can be used with a PC by adding a card swiper. Keep in mind that you may be limited to keeping the card design to a certain size – usually the length of a credit card – so it can be swiped through a terminal for activation. But there are always exceptions. Some modern magstripe cards have been reduced to a fraction of that size, allowing them to fit on key rings – an option that is used heavily for loyalty cards and even by some major retailers for their gift card programs.
- A bar coded gift card allows you to experiment with any size card that can hold a full bar code. This is another instance in which smaller plastic tags have proven to be extremely useful as consumers are able to easily fit them on any keychain. However, bar code cards require you to use a scanner or reader to activate them. If you don’t already own one, you’d need to purchase one to use this type of gift card.
- For franchise businesses with multiple locations, smart card technology can be embedded into a computer chip instead of a central database, allowing you to store account information locally on the card and saving the cost of maintaining a large database. That said, smart cards require special card readers that are quite expensive. And unfortunately, the lack of current standards and supporting infrastructure make them a less than ideal option for most gift card systems.
- Credit card terminals – If you want to activate gift cards quickly and conveniently, credit card terminals work best. Most businesses already have terminals in place for standard credit card processing. As a result, this is the least expensive option for getting started with a gift card system. However, you’ll have to pay fees each time you activate a gift card or when a customer redeems one.
- PC-based system – A PC-based system lets you avoid transaction fees and gain control of all your data, but will cost several hundred dollars more up front. In addition to software, you may also need extra computer devices such as a special attachment for a keyboard or monitor for swiping the gift cards. PC-based systems also require staff to manage the software and run reports. In addition, costs continue post-purchase, with some vendors requiring additional fees for software upgrades and the replenishment of your card supply.
- ASP activation – Short for Active Server Page, ASP activation allows you to set up a gift card by simply accessing a web site, entering the number on the back of the card and the value to be added, and then handing it to the customer. The advantage here is that the provider does all of the management. However, most businesses opt for a terminal or POS solution because of the familiarity it provides in relation to their existing processing equipment. They also don’t want to compromise sales and transactions if their Internet connection goes down.
Gift card activation
Depending on the dollar amount you want to invest up front as well as the added fees you’re willing to absorb post-implementation, there are a number of activation methods, geared toward specific types of technology, including:
Gift cards are bearer instruments – meaning that if people find a lost or stolen card, they can use the value. However, many retailers now offer the opportunity to protect the investment of a gift card by registering it. It’s an additional measure of security and protection and lets customers feel they are using a safer alternative to cash.
Upon registration, customers are able to retrieve remaining balances and request replacement cards. In addition, their purchase behavior can be tracked, providing valuable data related to sales and promotions. At the same time, customers are also offered the opportunity to enroll in loyalty programs, further connecting them with your brand.
Registration can be completed at the point of sale or, more commonly, through your company’s website, enabling customers to register from home and sign up for newsletters and additional communication.