Gift & Loyalty Card Systems – A New Era In Technology
A new era in technology for Gift and Loyalty Card Systems has arrived! Is your business caught up in expensive transaction swipe fees and monthly service fees? Would you like to own and control your database of patron information on YOUR computer? Read on.
Remember the old technology? Merchants who want to implement a plastic magstripe gift card and/or loyalty card system must use a credit card processor or a company who used similar, credit card based technology. It was, and remains, a very expensive way for merchants to process these types of cards. The expense comes in the form of transaction swipe fees ranging anywhere from $.08 per swipe to as high as $.35 per swipe as well as additional monthly fees of $40 – $100.
About ten years ago, some technologists started to take a fresh look at this expensive, fee riddled approach. They began to ask, why not use the computer-based technology that many merchants already have? Back then, almost 70% of the merchants in the U.S. had a computer on site. That number has grown substantially since then with the trend towards lower prices for computer hardware and software.
As a result of the research, today a new technology is available to process gift & loyalty cards in a much more cost effective manner that challenges, if not eclipses, the standard credit card technology. Not only is this new pc-based technology cheaper to own and operate, but it has allowed the merchant to own and control their own database of patron information on their own computer(s)! No more transaction swipe fees, monthly fees, database management fees, etc. associated with the traditional credit card based technologies on the market. The new pc-based technology is not limited in form and function as the credit card based technology where some processor owns and controls the patron data for the merchant. With the pc-based approach, the merchant is not limited to just a set number of management reports that he/she has to go to a website to generate often times for a fee. Instead, a report generator is commonly available which allows the merchant to group and sort an almost infinite number of reports with the click of a few buttons a very important tool to allow management to analyze the effectiveness of their card programs and to improve them if necessary. Theres nothing like accurate and instant feedback to make good, informed management decisions!
Local computer-based card systems are not just limited to gift cards and loyalty cards. There is no limit to the card-based applications that can be written into software such as this. A whole suite of card-based functions is available to allow merchants to better market their businesses to their clientele without all the credit card overhead. Examples include: reloadable cash cards, promotional cards, patron refund cards, courtesy comp cards, employee discount cards, etc. So with a local pc-based system, the merchant can expand the use of these popular, money-making cards to many other applications other than just gift & loyalty. One very highly used function is for promotional cards.
Since the merchant has the database of patron names and addresses on their computer, instead of on some credit card processors central server in Des Moines, the merchant can easily send out or hand out cards to their customers prompting them to come into their store(s) to get their card swiped to find out what they won. This is kind of a mystery card promotion where the customer could win e.g. anywhere from $5.00 to $100.00 or perhaps the card is like an electronic coupon card where a percentage off of some goods or services are offered. This has proven to be extremely effective in getting old customers back or also in finding new customers when cards are sent out via a mailing list which can be purchased inexpensively. And inexpensive is the key word. Depending on volume, a mailer with an attached card with a magstripe or bar code and the recipients name and address can be printed and mailed out for $.15 – $.30 each, plus postage. This is certainly a small price to pay to get customers to come through a merchants front doors and who will almost always spend a lot more than that!
When evaluating pc-based card systems, its always best to keep future needs in mind. As a business grows, so will the database of customers who have cards. So its important to choose a commercial strength software product which has database architecture sufficient to handle a large amount of data, for example, Microsofts SQL database. There are some pc-based card systems out there which fall short in this regard and utilize desktop databases like Microsofts Access database. Merchants generally run into problems a couple of years down the road with these types of databases.
Also, for merchants who have more than one store location and/or have independent franchise owners, its important to choose a pc-based card system which has the capability of connecting stores together. This way, a patron can buy a gift card at one store location but have the freedom of using it at other locations. The same holds true for loyalty cards, cash cards, promotional cards, etc. This is usually accomplished by having a high speed internet connection at each participating store and software which can reconcile the transactions in order to determine what stores owe what to what stores. The premiere pc-based card systems will also be able to perform ACH (automated clearing house) functions so that the appropriate dollar amounts will automatically be debited and credited to the appropriate merchant checking accounts. This way, the merchants dont have to write checks to each other and have to do very little to manage their pc-based card systems except just watch the money roll in!