Gift Cards Keep On Giving (Part One of Series)

If you haven’t thought about introducing a gift card program, there’s no better time than the present.

Consider the popularity of gift cards among consumers. Aite Group, a consulting firm, says the volume of private-label (store) gift card transactions processed in the U.S. rose from 810 million in 2001 to 2.43 billion in 2007 and will reach a level of 2.45 billion cards, representing sales of $39 billion annually, by 2011 (up from $38 billion in 2008). The average number of private-label gift cards purchased in the U.S. each year stands at 4.2 cards per consumer. Even better, many consumers not only spend more than the value of a gift card in the store or restaurant; they opt to reload the card and use it for future spending.

Another factor to consider: Innovations in technology have made gift card programs much simpler and less expensive to implement, as well as more appealing to consumers. Vendors, including pcAmerica, now offer programs that let merchants tie gift cards into their POS systems, eliminating many of the accounting problems caused by paper gift certificates. pcAmerica also makes it easy for merchants to administer a combination of gift-loyalty card programs, where a single card stores both a dollar value and accrued points or spending totals.