The Gif

t That
on Giving

by Brent Bowen       

   SALES ORGANIZATIONS LOOKING FOR SERVICE DIFFERENTIATION can look no further than gift and loyalty solutions to provide that needed edge. There is considerable talk about e-commerce and the use of web appliances to conduct merchant processing, but do not overlook the enormous opportunity to add value by offering loyalty and gift card services. By incorporating gift and loyalty solutions into your product mix you will realize the benefits almost immediately.
   The key is selecting a program and platform that meets your needs as an organization. Are you mostly interested in upfront new hardware sales? Are you concerned about merchant attrition because it will affect your long-term residual income? There are programs and solutions that will meet most any need you have as a sales organization. Look around, select a partner that has at least an 18 month development plan and make certain the pricing structure fits your business model. Once you have that in place it is a race to market share.
   In many cases the gift and/or loyalty solution is the "foot in the door" introduction to new accounts where credit/debit then becomes the add-on sale. This is because gift/loyalty is a relatively new concept for the small to medium sized retailer. Also a merchant does not have 8-10 people per month trying to sell gift cards like they see with credit/debit. Although gift/loyalty creates the opportunity, the hardware sale or the credit residual is still a key component to the revenue stream. Eventually, over time, this will change as loyalty transactions are payment independent. A successful loyalty solution will generate far more transactions per day than credit processing which is only a portion of the payment mix.
   Maybe even more important than selling a gift card solution to a merchant to capture hardware sales or generate residuals is the opportunity to position your company as a service provider prepared to enhance the merchant's business. Merchants feel they need to take credit/debit as a payment mechanism but quite honestly they can find that service simply by looking in the yellow pages.
   On the other hand, merchants want to offer gift card and provide loyalty schemes to maintain their customer base, modify purchase/behavioral habits and increase sales. These services can be resold to existing accounts and also create opportunities in accounts not previously interested in moving their credit processing. These sales are more consultative in nature because you can demonstrate how the solution will truly benefit their bottom line.
   Marketing gift and loyalty functionality is quite straightforward. Understand your business model then select a vendor to secure a short and long-term strategy. Identify who will be responsible for each component of the service upfront to avoid problems and headaches once you begin closing business. This includes card creation, merchant setup, terminal downloads, help desk support, documentation and back-end processing. Also, understand the system capabilities and limitations so that you do not oversell the service. Most vendors provide complete end-to-end solutions or allow you to choose a-la-carte so you can provide many of the services direct to the merchant.
   Although gift card processing is fairly straightforward, the competitive playing field is constantly changing. New products and services including instant rewards, frequency incentives, behavioral purchase modification and other non-financial transaction-based solutions are being incorporated into the payment platform everyday. This shift is a genuine opportunity to generate additional revenue from a sale at little or no added cost of sales and will create a true value-added relationship with your customer.
   Gift card processing is just the primer in what is certain to be an explosion of non-financial based transaction services. Providing gift and loyalty solutions as an integral part of the payment solution sale is key to customer retention down the road. They are easy to sell, easy to maintain and will be profitable for a long time to come.

Brent Bowen is the President of Transaction Payment Systems, LLC. TPS is a value-added processor specializing in Gift, Loyalty, Electronic Benefits Transfer (EBT), credit, debit and other specialty processing needs. Contact Brent Bowen by phone: 800.999.8674 extension 303, email: or Visit the TPS website at