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PRINCETON, N.J. -- Enactment of new rules governing gift cards provides businesses with an opportunity to maximize their gift card programs this year, according to a leading payments processor.
The new rules were passed as part of the federal Credit CARD Act of 2009 and took effect on August 22, 2010. Because the rules address many prior consumer grievances, businesses will likely see an increase in gift card sales this holiday season and beyond, according to Heartland Payment Systems.
According to the National Retail Federation (NRF), Americans spent nearly $24 billion on gift cards during the 2009 holiday shopping season. However, many gift card recipients never redeem the cards due to expiration dates, dormancy fees and consumer forgetfulness. The new rules address those consumer concerns by extending expiration dates, allowing for replacement cards and mandating the disclosure of fees as well as placing a limit on them. The new regulations apply to store gift cards (closed-loop) and gift cards with card brand logos (open-loop), but do not apply to reloadable prepaid cards and cards that are of a reward or promotional nature.
Heartland offers the following tips to help businesses maximize gift card programs this holiday season:
Make sure your customers are aware of the new rules. Develop signage and collateral that details how the new rules affect consumers. This new law requires disclosure of the new rules on gift cards and gift certificates manufactured on or after August 22, 2010. For gift cards produced prior to April 1, 2010, the effective date of the disclosures is not until January 31, 2011.
Order holiday cards and carriers. Add holiday-themed gift cards and card holders to your stock to encourage your customers to purchase cards for their friends and family.
Hand out promotional gift cards to bring in new customers. Increase the return on preloaded cards by distributing them to nearby businesses to reach new customers.
Run a customer rewards promotion. Create a real-time promotion that your customers associate with a specific time of year. Doing so can entice your customers to come back more often and spend more when they do.
Engage your employees. Encourage your employees to get to know your customers by name. Selling gift cards to those customers will be easier when you have established a relationship with them.
Place cards in a visible area. Your customers won’t buy gift cards if they don’t know you have them. Place cards and promotional materials in visible areas of your business, such as near the entrance or at the cash register.