Accepting Gift Cards with Merchant Accounts

Gift certificates have always been a large part of business sales.  It's easy to print off a bunch of paper gift certificates and allow people to purchase them as gifts for others, and the profit margin is high.  For less than a few cents, you're able to sell goods of any denomination that you choose (or the customer chooses!)

Did you realize that your business can benefit greatly from the use of electronic gift cards?  Electronic gift cards work like a pre-paid credit card.  Someone "funds" the card by purchasing it at the register or online.  When the card is used, it is either swiped through the normal credit card terminal or the card numbers are entered into an online form in the same way a credit card number is entered for payment and the amount is deducted from the total balance available on the gift card.

If you've avoided gift cards for your business in the past because you thought they would be expensive to create, you're really missing the boat!  Many companies can set you up with gift card programs for less than $1 per gift card created!  What other product can you sell for $20, $30, $100 or more that costs you a $1 to create?! 

In addition to the immediate financial benefits of selling gift cards, you can set up gift cards as a customer loyalty program.  Once they've used the available balance on the card, you could allow them to re-load the card and keep the customer coming back for the convenience of swiping the card for their purchases.

Uses for Gift Cards

Gift card sales are highest during the holiday season.  Many people choose to purchase gift cards for friends and family over actual gifts, because it allows the recipient to choose whatever they like from the business.  Gift card sales have seen a tremendous increase over the last few years, and any business that offers them during the holiday season is likely to experience a nice increase in their own sales.

Gift cards are also a wonderful opportunity to resolve customer service issues.  When a customer makes a complaint about a product or service, don't just apologize- give them a gift card so they can come back and get something else.  This typically makes the consumer happy that you've made an effort to correct the issue, but it also allows you to redeem yourself for the customer who has generated a poor opinion of your business or service!

How Gift Cards Work

Most merchant account providers can work with your business to create gift cards that can be swiped or entered through the card processor in the same manner as a regular credit or debit card.  The terminal can also load funds onto the card, or a internet browser using the correct software can allow an internet or home based business owner to "fund" the gift cards with the customer's deposit. 

When the cards are swiped to make a purchase, the money is simply deducted from the amount available on the card- in much the same manner as a debit card will deduct money from a checking account that it is attached to.  Gift cards are faster than cash or check writing, and faster than manually processing a paper gift certificate.