Magazine article Marketing

Helen Dickinson on Retail: Electronic Gift Cards Will Redeem Voucher Sales

Magazine article Marketing

Helen Dickinson on Retail: Electronic Gift Cards Will Redeem Voucher Sales

Article excerpt

No doubt many of you will have received, or given, gift vouchers over Christmas. They are not the most exciting present in the world, but at least the recipients are not clamouring to flog unwanted gifts on eBay.

Well-entrenched in the gift market, vouchers have enjoyed limited growth in recent years, but this could be about to change, as the next-generation voucher - stored-value gift cards, generally made of plastic - are slowly beginning to appear. This could herald a revolution in the voucher market.

Those retailers already offering gift cards include Boots, Harrods, Woolworths and Debenhams, but widespread adoption by the industry has been held up by work on till systems to ensure compliance with Chip and PIN requirements by the 1 January deadline. Now that this date has passed, retailers can forget about Chip and PIN (they hope) and start using the upgraded payment systems to introduce value-added services - such as gift cards.

The advantages of stored-value cards are manifold, but the crux of their appeal for retailers is that they move vouchers from their long-inhabited paper world into the electronic age. This removes the nightmare of processing vouchers at the till.

I once worked on an IT project that included a point-of-sale implementation, and the most complicated aspect was handling vouchers at the till. We had to guard against theft and track each voucher manually by its issue number, from the time it was transported from the printers to the time of its redemption in-store and final cancellation.

In comparison, gift cards are a joy to handle; they have a secure database at their heart, which holds the details of each voucher electronically.

Since a physical 'card' is worthless until activated at the till, retailers now have the opportunity to market vouchers as they have never done before.

Unleashed from the till drawer, they can be placed in prominent positions in-store, with bright merchandising to catch customers' attention.

The prospect of using licensed images on the cards offers the opportunity to market vouchers to youngsters. The attractiveness to this audience is enhanced by the ability to top up the cards on an ongoing basis, giving them the properties of a debit card. Starbucks already encourages top-ups to its cards, and its product lends itself well to repeat purchases. …

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