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How Do Gift Cards Work?
Home » Small Business » Gift Cards » How Do Gift Cards Work?Gift cards are purchased just as any other low-cost, impulse item. When offered close to the check-out counter, customers simply choose the appropriate card and pay for it as they pay for their other merchandise. During this process, the price, merchant, card number, etc. are stored in the card’s magnetic strip. This information can also be transmitted to a Data Processing Center so that the customer can call to check on the card’s balance or to purchase additional value for the card. The merchant then produces a receipt for both the store and the customer. When the card is redeemed as part of a purchase, the card is scanned, using some or all of the value to pay for the purchase, and a receipt is produced again, showing and the item(s) purchased, the price paid, and the new card balance.
Merchants who already offer the consumer the ability to pay by credit or debit card will have a smaller initial cost when introducing gift cards into the store’s product line, since many gift cards are designed to work with a store’s existing equipment. Merchants can offer gift cards at set value increments, such as $5, $10, $50 or more, or can allow customers to add whatever value they wish to a card.
If your store also offers online purchases, you can offer consumers the ability to pay for purchases using store gift cards, making online purchasing available to those shoppers who prefer not to use their personal credit cards for internet shopping.
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