by Mike Peterson | Nov 4, 2024 | Gift Cards, Merchant Services, News
Small businesses everywhere are gearing up as the holiday season approaches for the busiest shopping months of the year. With shoppers looking for quick and versatile gift ideas, gift cards for small businesses have emerged as one of the most popular holiday items. Not only do they provide convenience to the customers, but they also provide massive benefits to small businesses. Gift cards are a win-win for both buyers and sellers, and from free marketing opportunities to additional revenue streams, there’s plenty to like about them.
In this post, we’ll talk about how gift cards help small businesses during the holidays and explore some creative ways to promote them.
Why Small Businesses Should Stock Up on Gift Cards for the Holidays
The most simple and powerful way to attract new customers and boost sales is with gift cards. They’re especially great for gifts during the holidays, as they’re ideal presents for those friends and family that are hard to shop for. Stocking up on gift cards for the holidays is more than just selling a product, it’s giving your customers the gift of flexibility. It’s especially handy when people are trying to manage a bunch of lists, gifts and schedules.
The main thing for small businesses is to have a lot of gift cards and put them out everywhere. Make sure you have your gift cards visible at checkout, on your website, and in any seasonal promotional materials. You’d be surprised at how gift cards help small businesses during the holidays by providing an easy, attractive option for last-minute shoppers.
The Benefits of Gift Cards for Small Businesses: Free Marketing in Every Gift
One of the best parts about gift cards for small businesses is that they’re essentially free advertising. When a customer buys a gift card, they could be bringing your business to someone new. This new customer would not have come into your store or visited your website if it weren’t for that gift card.
Gift cards are especially powerful because they have a personal endorsement from the giver. Gift cards for small businesses are given to people by their friends and family who really like the business they are giving the gift card to, so the gift feels more trusted and meaningful. That kind of word-of-mouth recommendation is priceless for small business. The more you introduce your brand to new customers, the better the chance you have of turning them into loyal patrons.
It’s a great idea to take this effect a step further by creating branded, visually pleasing gift card designs. These cards are mini billboards for your brand and guarantee that your business makes a good impression even before the gift card is redeemed.
Creative Ways to Sell Gift Cards for Small Businesses
One easy way to boost your gift card sales is to incorporate them into seasonal raffles, gift baskets, or holiday bundles. Here are a few creative ways to sell gift cards for small businesses this holiday season:
- Holiday Raffles: In store or online, host a holiday raffle in which customers can win a gift card. This can also get people excited about your gift cards and will increase your foot traffic or website visits. Likewise, many customers who have not won will end up buying a card.
- Gift Baskets or Bundles: Make gift baskets with small gift cards which include your store’s popular products. If you’re a salon, this works great for a “spa day” package, or if you sell gourmet treats, this works great for a “movie night” bundle. This card encourages people to return and explore what you offer.
- Buy One, Get One (BOGO): During the holiday season and in the days following Christmas, think of trying a “buy one, get one half off” promotion on the gift cards. For instance, customers purchase a $50 gift card and receive another $25 of the same to themselves or to gift to someone else.
This holiday season, add a personal touch to your gift baskets with gift cards for small businesses. They’re a meaningful way to support local shops and offer unique options for your loved ones.
Unredeemed Gift Cards: The Secret Revenue Boost for Small Businesses
Did you know that a lot of gift cards never get redeemed? Research found that a good chunk of gift cards for small businesses never get fully redeemed, and often never are, as recipients forget or gift cards go to waste. For small business owners, this means an immediate kick in revenue without having to order more inventory or add more service.
Extra revenue without additional expenses is provided by unused or partially redeemed gift cards, sometimes called ‘breakage’. During slower times after the holidays, when every little bit of money counts, this financial benefit is especially useful for small businesses.
This added revenue cushion is good, but keep in mind that the goal is still to provide a great experience to every customer who visits, whether or not they’re redeeming a gift card. Each visit is a chance to make a one-time gift card holder a regular customer.
Using Gift Cards as a Year-Round Marketing Strategy
Gift cards aren’t just for holiday sales, they’re a year-round marketing tool. Some people purchase gift cards as gifts during the holiday season, and people may still purchase gift cards for birthdays, anniversaries, graduations, and other celebrations even after the holiday season. If you make gift cards a regular part of your promotions, you’ll continue to get new customers all year long.
To keep gift cards top of mind, consider these strategies:
- Email Reminders: Seasonal emails like promoting gift cards and how they can be the perfect gift for any occasion.
- Social Media Promotion: Post photos on social media of your branded gift cards. Help customers show friends and family how much they would appreciate a card and how easy it is to pick one up.
- Incentives for Use: Challenge current customers to redeem their gift cards using seasonal or limited time discounts. For instance, you can give a small discount on the first-time purchase with a gift card and thus convert new customers into repeat buyers.
Ready to Start Selling Gift Cards for Your Small Business?
We make it easy for small businesses to offer gift cards at Card Systems, Inc. We’re here to help whether you are just getting started or stocking up for the busy holiday season. Our gift card solutions are easy to use, affordable and streamlined so you can provide your customers with what they need most—your service.
We can help you make gift cards a profitable part of your business this holiday season. Don’t wait, reach out today to learn more about how easy it is to get started!
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by Mike Peterson | Oct 30, 2024 | Merchant Services
Businesses have to evolve to keep up with customer demands while still protecting themselves, especially in the payments space. Managing chargebacks is one of the challenges that every business faces, and if left unchecked it can have a huge impact on your profitability. In this article, we’ll discuss how to prevent chargebacks, what they are, and why they matter to protect your business’s bottom line.
What is a Chargeback?
In order to prevent chargebacks, you need to know what they are in the first place. A chargeback is a reversal of a transaction started by a customer through their bank. It’s essentially a customer request to dispute a charge they see on their statement. A chargeback is different from a simple refund (which is done directly between customer and business) in that the customer’s bank gets involved. If a chargeback is filed, the bank will look and see if the customer has a legitimate cause for dispute, and if they do, the bank can refund the customer directly.
Chargebacks were originally created to protect consumers from fraud and unauthorized transactions, but they’ve evolved. Today, the reasons for which many chargebacks are filed include not just fraud, but simple dissatisfaction of the product, buyer’s remorse, or even intentional chargeback abuse (commonly referred to as “friendly fraud”).
Why Chargebacks Are Costly for Businesses
Chargebacks aren’t just reversing a single transaction, they come with additional, often hidden costs which quickly add up. Here’s how chargebacks can hurt your business:
Lost Revenue and Product
If it’s a physical good, businesses also lose the product itself in most cases, and the revenue from the sale. You might not get the product returned, but still be out of pocket.
Chargeback Fees
The chargeback fees your payment processor charges for each chargeback filed range from $20-$100 per dispute. This is to say that each chargeback could be more expensive than the transaction amount alone.
Higher Merchant Fees
If you have consistent chargebacks, providers will see your business as higher risk and will charge you higher processing fees. If your chargeback rate goes high enough, you could even lose the ability to accept payments.
Damaged Customer Trust
If you’re noticing frequent chargebacks, it means there’s something wrong with customer satisfaction or trust, something that can damage your reputation and affect customer loyalty.
Risk of Being Blacklisted
If your business is flagged or blacklisted by the banks and payment processors, excessive chargebacks can be the reason. This blacklist is very hard to remove and makes it almost impossible to find processing services.
Common Causes of Chargebacks
It’s important to know why chargebacks happen to reduce them. Here are some of the most common reasons:
Fraudulent Purchases
The leading cause of chargebacks is unauthorized transactions. But these issues must be guarded against through fraud prevention tools.
Customer Confusion
Customers sometimes don’t realize they’ve made a purchase on their bank statement or forgot about a subscription charge and end up disputing it.
Product or Service Dissatisfaction
If a product doesn’t say or do what it should, that can result in disputes. Delayed shipments can also cause complaints and chargebacks.
Friendly Fraud
If a customer files a chargeback on a legitimate transaction, this is called chargeback abuse. These can be due to buyer’s remorse, accidental disputes, or the desire to keep the refund and the product.
How to Prevent Chargebacks
With the right strategies, you can lower your risk of chargebacks and protect your business. Here are some effective methods to prevent chargebacks:
1. Fraud Detection and Prevention Tools
If your business processes high volumes of transactions, it is important that you implement fraud detection software. Fraud tools such as address verification, CVV checking, and 3D Secure are tools that prevent fraud transactions from getting through to your system.
2. Clear and Honest Product Descriptions
One of the biggest causes of chargebacks is the customer’s dissatisfaction with a product or service. If you can give them some accurate, detailed descriptions and set proper expectations this can go a long way in minimizing the risk of it. Tell customers what delivery time, refund policy, and other important details they should know before buying.
3. Detailed Records
The more information you keep on each transaction, the better you can dispute illegitimate chargebacks. To support you if a chargeback is filed, keep track of order details, communication history, shipping documentation, and delivery confirmations.
4. Chargeback Ratio Tracking
It’s good practice to regularly check your chargeback ratio, or the percentage of chargebacks versus total transactions. Staying in good graces of payment processors involves keeping your chargeback ratio below 1%.
5. Improved Customer Service
Investing in a responsive customer service team can help to resolve an issue directly with the customer rather than with the customer and banks, hence reducing the chances for a chargeback. Customers need to have an easy way to talk to you in case of questions or complaints and be proactive in giving refunds or exchanges when need be.
6. Recognizable Billing Descriptors
Default statement descriptors can often be unclear, leaving customers unable to recognize charges. Even valid transactions can prompt customers to dispute a charge with their bank if it’s unfamiliar. Notifying the merchant processor and POS company and using a clear statement descriptor helps lower the risk of chargebacks and avoids confusion. You can also add a customer service number so that if they need to reach out to you, they can do so instead of going about starting a dispute.
7. Well-Communicated Policies
Good clear policies around returns, refunds, cancellations help to control customers’ expectations. Reduce misunderstandings and prevent chargebacks by displaying these policies prominently on your website and in transaction receipts.
How Card Systems Can Help Protect Your Business
At Card Systems, we know how important it is to prevent chargebacks and protect your business revenue. Our secure payment processing solutions have built-in fraud prevention tools, chargeback management assistance, and account monitoring to help you proactively combat disputes. We can help you prevent chargebacks and grow your business.
Find out more about how Card Systems can protect your transactions and improve your customer experience by contacting us today!
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by Chandra | Jun 16, 2021 | Merchant Services, POS Systems
Choosing your Merchant Services Provider should be at the top of the list when opening a business
Banks try to “simplify” the task for you by offering their in-house services. However, is the bank really better for your company than a Local Merchant Service Provider? The answer is no; the bank itself is just a large-scale Merchant Service Provider.
While banks offer some of the same services that a Local Merchant Provider does like their own POS System and credit card readers, your Local Merchant Provider typically carries a larger variety of POS Systems. They make sure you never feel lost in the sea of merchants and almost always provide better service over the phone or in person. It is their core business to service your processing needs.
Bank of America Merchant Services and most Banks are just resellers that outsource customer service, leaving the merchant without immediate help if a problem occurs because the technology doesn’t typically belong to them. They are just reselling merchant processing along with their other bank services.
Technology is Key
The technology doesn’t always belong to the Local Merchant Provider either, but they take the time to learn the products that they are selling. For example, Card Systems has teamed up with business solutions merchants like Clover and Sound Payments, and others to help businesses directly and never leave you without support. In fact, last year they purchased an ownership interest in Edgeserv POS to help local restaurants provide a better overall dining experience.
Fees can be difficult to determine
In addition to the customer service not reaching the public’s standards, bank reviews reflected that banks can be deceptive in claiming lower rates. They try to say their rates cannot be beaten, but they just waive certain bank fees while raising prices on other services.
Pricing seems to even out or be more favorable from your Local Merchant Service Provider when unexpected fees begin showing up on the bank’s merchant statements. Businesses also ran into undisclosed contracts and high termination fees when the services were no longer needed.
3 main takeaways:
- Do your research before choosing your Merchant Service Provider
- Know what your business really needs
- Make sure your Merchant Service Provider is available when you need them (not just 9-5)
A 200-seat restaurant and a 7-table coffee shop do not need the same processing services, but they both need quality services. You want your customers to feel safe when making payments while at the same time make maximum profit from the transactions. Don’t overpay for services and technology you don’t need and make sure your provider is always available to help when you need it.
