Accepting gift cards for your small business is a simple, effective way to help improve sales. Gift cards are easy, convenient options that take the guesswork out of gift giving and allow the recipients to purchase the item or receive the service they desire.
There are many benefits of accepting gift cards. Here are just a few:
1. Generate brand awareness – With designs customized to display your business’ brand, logo, and colors, each gift card works as an advertisement.2. Acquire new customers – Gift cards help bring in new customers that might not otherwise shop in your store or eat at your restaurant.3. Eliminate “cash back” – By providing cards with store credit balances, you do not have to give cash back for returns and exchanges.
If you already accept credit and debit card payments at your brick-and-mortar store or on your eCommerce website, then you’re ready to accept gift cards, depending on the type.
To accept gift cards, you’ll need a:
There are two types of gift cards:
If you plan to offer closed loop gift cards, you’ll need to implement gift card program software with your POS system or eCommerce website to track your gift card purchases. This can potentially be set up through your credit card processor or managed by a third-party company.
To process a closed loop card:
When the recipient redeems the card, it can either be swiped at the terminal or entered online in the checkout form. The program deducts the amount from the balance.
Processing an open loop card is the same as processing a regular credit card. The customer swipes the card at the terminal or enters the information on the website. The acquiring bank sends the transaction to the bank that issued the gift card for authorization and payment. If there is enough balance to cover the purchase, the transaction is approved. If not, the transaction may be declined, or the remaining balance on the card may be applied to the purchase amount and then the customer must complete the sale with a different payment method.
Clover makes it easy to accept gift cards, manage account balances, and reload cards through your POS system. To learn about accepting digital or physical gift cards at your business, schedule a free consultation with our merchant services team today.
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