On 11-11-11, Certified Payment Processing Shows Eleven Reasons for Businesses to Provide Gift Cards to Their Customers

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A study done last year shows gift card usage continues to rise. According to the survey, more than three quarters of holiday shoppers will buy at least one gift card and 57 percent of adults say they prefer to receive gift cards.

The calendar reads 11/11/11, so in keeping with the numeric repetition of the calendar, Certified Payment Processing (CPP) is offering eleven reasons that businesses should consider providing gift cards to their customers:

1. It’s a growing market. According to a 2010 study by the National Retail Federation (NFR), interest in gift cards continues to rise. The research says consumers are spending more on gift cards, especially during the holiday season. The NRF study predicted that Americans will spend an average of $145.61 on gift cards, and total gift card spending is expected to reach $24.78 billion.

2. Holidays! This is the perfect time to offer the service, since your customers are looking for gifts to give at this season.

3. People like to give them, and they also like to receive them. According to the NFR study, 57 percent of adults saying they prefer gift cards. Also according to the survey, 77.3 percent of holiday shoppers indicate they will buy at least one gift card.

4. New regulations make gift cards even more desirable. In August of 2010, the “Credit Card Accountability, Responsibility and Disclosure Act (CARD)” went into effect. CARD stipulates that prepaid cards, gift cards and gift certificates cannot expire within five years of activation or unless the terms of the expiration are clearly disclosed. The law also bans dormancy fess, inactivity fees or service fees on gift cards unless there has been no activity in a 12-month period and the issuer clearly discloses all fees before the gift card is purchased. Fees are limited to one per month. The CARD act not only strengthens the lasting value of the cards, it will continue to enhance their image in the mind of the buying public.

5. It’s advanced cash flow to your business. A customer pays for the card in advance, but redeems for products or services at a later time. That’s upfront money!

6. If a customer buys your gift card, they will obviously return to your business to use that card. That builds customer loyalty and helps insure repeat business.

7. Gift cards increase your customer base. Because many people buy gift cards to give to others, those who receive the card will likely use that card in your place of business. This gives you a new customer, as well as a chance at their future business beyond the value of the card.

8. They are an excellent “word-of-mouth” method of marketing. The cards are personalized, and can be reprogrammed and reused. Those giving your imprinted gift cards are promoting your business to their friends and family, helping to increase awareness of your products or services.

9. Studies show customers using in-store gift cards spend more than the face amount of the card—with some estimates as much as 80 percent more than the face value of gift cards.

10. Not all gift cards are redeemed and not all the money on the card is used, so that’s additional profit for your bottom line.

11. The costs to provide gift cards to your customers are reasonable. Many businesses assume that gift cards are only for the largest, national retailers, but gift card service can be implemented in almost any size and every kind of business with very little start-up costs and low monthly fees.

CPP, a leading merchant services provider of electronic payment equipment for purchases made by debit cards and credit cards, can answer your questions about how to provide gift cards to your customers. CPP has more than 300 employees in Carrollton, Texas, as well as hundreds of sales associates in the field throughout the country.

About Certified Payment Processing
Certified Payment Processing (CPP) is a provider of credit card processing services and also leases point-of-sale terminals that quickly process all forms of payments: debit and credit card transactions, gift cards and checks. The products and services are designed to help businesses increase revenue, control costs, improve efficiency, enhance data security and provide their customers with the most popular payment methods. CPP has been a leader in the industry for nearly 20 years, and has more than 400 dedicated sales consultants in the field throughout the country, supported by 300+ office employees headquartered in Carrollton, Texas. With three direct sales entities – TransTech Merchant Group, Summit Merchant Solutions and ISIS Direct – CPP has more than 40,000 active merchants and transactions in excess of $3 billion.

Source: National Retail Federation

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Bill Prickett, APR