Gift Card/Stored Value Card Processing
A Stored Value Card (SVC) is used by a Merchant to issue spending credit to their customers. These cards are often given as gifts, employee awards, and in some cases offered by a Retailer for in-store credit on returned merchandise.
Unlike many prepaid debit cards, SVCs are not typically issued in the name of an individual account holder. According to TowerGroup research, annual gift card sales are predicted to hit $100 Billion by 2012.
The Value of Our Stored Value
Application Developers who offer a SVC solution become more valuable to Retailers by allowing them opportunities to:
- Increase Sales--When Consumers use a gift card they typically spend 25 to 35% more than the face value of the card. Additionally, because Vantiv’s program is “closed-loop” the use of cards drive retail foot traffic or online purchasing because cardholders can only use the merchant branded card at the merchant’s location
- Improve Cash Flows--Gift card funds remain on the card and in the Merchant’s bank account until the card’s value is depleted improving cash flow for Merchants
- Reduce Loss--Most gift card programs offer a “no-cash back” policy enabling Merchants to keep their profits on sales of cards
- Cash Benefit—In some states, unused dollars on gift cards belong to the Merchant once the expiration date has passed or the card has been depleted by the inactivity fees
- Brand Promotion--Gift cards are an excellent method for branded promotion. In a “closed-loop” environment the Merchant receives greater brand awareness than in an “open-loop” program where Card Associations (Visa, MC, AMEX, and Discover) receive the majority of the recognition since there is no limitation on where the card can be used
- Customer Satisfaction—75% of Consumers are currently buying gift cards for holidays, birthdays, anniversaries, and other special occasions. Offering gift cards allows Retailers to build customer satisfaction and repeat business
Ecosystem of Gift Card/Stored Value Providers
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