Swipe Out

April 1999


Swipe Out

New gift certificates use stored-value technology for cool credit

Gone are the days of oversized paper gift certificates that get stuffed into wallets or, worse yet, forgotten at home. National retailers are rolling out swipeable, storeable, reusable gift cards that look and act like credit cards.

The gift cards showed up this past holiday season at stores such as Borders, The Gap, Sears and Home Depot. Using "stored value" technology, retailers assign value to the cards. The cards have magnetic stripes on the back; sales associates simply swipe them when the gift is redeemed. Customers can cash in only part of the certificate's value at a time (eliminating time-consuming "rain checks"), and may add value to the cards. The size and shape make them easy to store so they're always with customers. Some stores use toll-free numbers through which customers access an automated voice system to check the balance on their cards.

Many retailers modify existing point-of-sale systems to activate the cards and accommodate transactions, says Kim O'Connor, product manager for ValueLink in Sunrise, FL (954) 845-4514, www.valuelinkcards.com). The company provides the plastics for its clients' cards, processes gift card transactions and stores retailers' information in an on-line database.

Paper gift certificates are a headache, says O'Connor. "There have been many problems with fraud, such as duplication and internal theft, because there's no way to track paper certificates. They're also clumsy when it comes time to sell them to customers. Now it's as easy as a credit card transaction." Because the cards are blank until activated, retailers can openly merchandise them on countertops, which increases gift certificate sales, she says.

– by Stacey King

Copyright © 1999 by Bond Communications.


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