What is a Gift Card?

A reusable, stored-value card that enables merchants to have an electronic alternative to paper gift certificates. Our gift cards are composed of high quality PVC formatted to standard credit card size and thickness, which includes a magnetic stripe on the back that contains various card information.

History of the Gift Card

Gift cards were originally introduced by retailers like McDonaldsTM and JC PenneyTM in the early 1970s and 1980s using thin plastic cards with the purpose of tracking purchases and redemptions more efficiently and securely than paper.

Gift card programs began getting more exposure and recognition in 1995 with their introduction by a few larger retailers, such as BlockbusterTM and K-martTM. These retailers adapted their gift card systems to replace paper gift certificates and to help streamline tracking and reconciliation. The gift card programs continued to gain momentum and popularity after several other large retailers began promoting the cards through the media and TV.

Over the years the gift card concept has proven its worth and overall necessity to retailers of all types. Gift card technology continues to grow and become an important tool and cash flow generator for businesses involved in various types of industries.

How Does a Gift Card Work?

Gift Cards are sold to customers for their own use or can be given to family or friends. Cards can be redeemed at store locations just like a credit card and balances can be debited from the card upon purchase.

Cards are swiped through traditional credit card terminals and POS systems and payments are collected by the merchant at the time of sale.

Statistics and Benefits

Gift Card Statistics

Today gift cards continue to grow in popularity due to the ease of use, streamlined reporting and added security over paper based gift certificate programs. The programs offer many important features that help merchants manage sales, tracking and reconciliation of cards.

The technology offers the business owner complete control over how the program is managed and whom within the location has privileges to administer transactions at the location. The gift card offers the recipient the flexibility to use the balance to get what they want.

• Two-thirds of all consumers have purchased at least one gift card.

• 55% of gift card recipients make more than one trip to the business to deplete the value of their card.

• The average recipient spends 20% more than their card’s initial value.

• 69% of companies using them stated that gift cards are more effective than cash in motivating and rewarding employees.

• In the 2007 holiday season, the average amount placed on gift cards was $203.

• 10 – 15% of gift card recipients never redeem the full value of a card, meaning the business keeps it as profit.

• 81% of consumers purchase gift cards for birthdays. 67% percent purchase gift cards for holidays.

• Studies found that 40% of shoppers using a retailer’s card bought items at full price. Only 16% of shoppers using other payment methods bought at full price.

• When retailers switch from paper gift certificates to gift cards, they sell anywhere from 50-100% more. (Sources: American Greetings, epaynews.com, Green Sheet Quarterly, National Retail Federation, J.C. Williams Group, Incentive magazine)