Gift card system pricing
A gift card system requires you to invest some time and money but the potential for strong ROI makes it an attractive consideration. That’s because gift cards have a unique value proposition: there’s no other product that a merchant can buy for less than $1 and sell for hundreds of dollars. And that’s also probably why 100 percent of big box retailers are now participating in gift card and rewards programs that allow their customers to redeem gifts and points either in-store or online. Similarly, about 30 percent of small businesses now participate in dual-redemption programs.
In 3 to 15 days, you can get started with a basic gift card system for as little as $250 to $385. This option is a good way to test drive a program but isn’t ideal if you anticipate a heavy level of adoption in relation to a new gift card program or are already working with a large volume of gift cards.
Depending on the vendor you select, this package typically includes 100 to 500 gift cards with your company name on them as well as standard sleeves, an acrylic or cardboard POP display for your countertop, standard static cling decals and personalized card design. Many vendors also provide software that, in some cases, will enable use with your existing credit card processing terminals.
For larger orders, vendors typically offer volume discounts. The average gift card order for a small business is 500 to 1,000 cards and breaks down to a cost of around 77 cents each. Many vendors also include additional marketing materials with larger orders such as custom displays, detailed design work, and even promotional products like buttons, posters, and table tents.
Simplifying management through software
Most programs include some form of gift card software, an add-on that has developed considerably in just the past few years. With costs ranging from ‘free’ to a month-by-month fee or yearly contract, solutions vary extensively. For example, vendors providing free or low-cost software do so as an incentive to promote a basic gift card program, harnessing your existing credit card terminal to perform functions like reloading cards with a specific dollar amount or adding and subtracting loyalty points. This type of bare bones program has been shown to work well for stand-alone brick and mortal locations.
At the same time, businesses with multiple locations or larger programs have found increasing value at the higher end of the scale due in large part to the complexity and customization of the software. For around $25 per month, vendors can provide customized software that acts as a complete marketing platform, encompassing all gift-card and loyalty program activities.
These programs are often so comprehensive they even handle incentive-based marketing campaigns, managing your email database and sending out promotions on a regular or user-defined schedule. The monthly service plans generally include installation and the training of employees, though some providers may charge an hourly consultation fee for either of these services. In addition, many vendors are now providing webinars that include detailed instructions as well as video tutorials, enabling you to continually train new or existing staff at your convenience.
Branding and customization
Customization is another aspect that has become standard in many offerings, with companies either including it as part of a month-to-month package price or offering basic customization for free, which may include your logo and other basic design elements.
One thing to note: enhanced customization options, such as detailed graphics or die-cut card shapes, may take up to 3 to 4 weeks.
Transaction and monthly maintenance fees
A big factor in your costs will be the transaction fees for each gift card that you activate. This is where the vendors who provide many of the supplementary services for free make their return. To add and redeem funds, the average fee ranges from 12 to 25 cents per transaction. For gift cards, you pay either a higher activation fee for unlimited transactions or smaller fees each time a customer uses the card. For loyalty and membership programs, you typically pay a single fee at the time of activation. Some vendors waive these fees for businesses who subscribe to a monthly service package.
To process transactions and maintain your program, vendors may require a one- to three-year contract at $5 to $25 per month. Although, as mentioned above, some vendors on the higher end of the cost scale will allow you to participate in their program on a month-by-month basis. These costs cover reporting and fraud monitoring of your gift cards as well as customer support.
Card processing terminals
If you don’t already own a credit card terminal, you can find an extensive range of countertop and monitor-mountable terminals on eBay for $150 to $250. You can also rent terminals for $15 to $20 per month. Your gift card system provider may be able to suggest a terminal vendor who may provide a discount as well.
The decision whether to buy or rent your credit card processing equipment is often directly related to the size of your business and your current cash flow. Though the cost of equipment typically makes it cheaper to buy, if you’re low on cash or anticipate installation into a large number of locations, leasing may be the better option. Learn more about Credit Card Terminals.