How Stored Value Works

One card system—many business-building applications.

Gift Card Sales
Merchants use in-store displays to merchandise Gift Cards much like they would any small impulse-buy product—by the register with counter signs and colorful card hangers. A customer purchases a Gift Card with cash, check or credit card for any dollar amount desired. The amount purchased is recorded as “stored value” or “prepaid” in the host database.

The Cardholder presents the gift card for full or partial payment of a purchase. The merchant swipes the card through their POS terminal for authorization and transmission of transaction data on the host platform. The card’s magnetic stripe identifies the card number and merchant location for which the card has been issued.

Loyalty Cards
Several points-based loyalty card programs can be implemented using stored value technology. One of the simplest and most powerful applications is what we call Auto Rewards. Under this program, the system automatically adds a specified Reward Value to your customer's card when that customer has accumulated a designated number of points.

For example: when 50 points are accumulated, $10 of spendable value is loaded on the card and the 50 points are removed. This cycle simply repeats, continually motivating the customer to return to earn more points and more reward dollars. It's also easy for the customer to understand and for sales clerks to administer.

Reload Incentives
Merchants may offer an incentive to customers to encourage card reloading. For example: increase the customer’s stored-value amount by 20% (i.e. a $50 reload is recorded as $60 in stored value for the cardholder).

Data Processing
Gift card systems operate in real time as a closed loop debit network. Transactions, such as adding value, sales and balance inquiries are transmitted from the point of sale to the Data Center. The transaction is authorized, the data record for the card is updated in the database and an approval or other information is transmitted to the POS terminal.

A variety of program management reports are available 24/7 online. You may generate Transaction Detail or Summary reports for specified periods of time, or a Cross Location report that reconciles card redemptions at merchant locations other than where the card was originally purchased, such as a franchise chain.

Gift Cards & The Law
Many states have passed laws governing the use of dormant account fees and expiration dates for prepaid gift cards. However, because of the negative impact on sales that such policies can have, most merchants have adopted and even advertise a "no fee, no expiration" policy for their gift cards, whether or not state laws require it.

BIRTHDAYS are the #1 gift card occasion. Start your gift card program today.