Franchising: Insight into the Gift Card Market

giftcardmoney copyLet’s begin with: What is a gift card?

According to, “A gift card is a restricted monetary equivalent or scrip that is issued by retailers or banks to be used as an alternative to a non-monetary gift. Highly popular, they rank as the second-most given gift by consumers in the United States (2006) and the most-wanted gift by women, and the third-most wanted by males. Gift cards have become increasingly popular as they relieve the donor of selecting a specific gift.”

Everyone knows that selling more gift cards is essentially like selling more products; the more you sell the more you have, hence the more money in your pocket. Gift cards are a great way to market and expose your business. Read more about marketing gift cards here.

With many variables into understanding gift cards, especially with franchises who share cards- Here are a few things to consider:

• In belonging to a franchise, the benefits of gift cards cannot be reaped without the team mentality. From this perspective, gift cards benefit the entire team in the long run because the consumer feels empowered. There is a wider range of reach when a customer considers what kind of gift card to buy and if the person they will be purchasing for will be able to use it in their own surrounding location.

• Gift card sales are technically a liability from an accounting perspective. Even if an individual franchisee decides not to share gift cards with other franchises, they would still be required to put that money aside until it is redeemed. In the case of franchise gift card sharing, those funds are now being kept in a joint account. You can ask any accountant or individual that deals with taxes. This is the nature of how gift card sales work.

• The majority of gift cards are usually redeemed at the store from which they were purchased, since the friends and family of the gift card buyer will most likely be in similar location. In the end, which is the better choice? The money in the customer’s pocket or in the franchise account? If in the customer’s pocket, you are competing with all the other business locations around you as well every other item a consumer might buy online or anywhere else.

• Most often, gift card programs are profitable for franchise systems that provide low-cost, volume goods such as a retailer or a quick-service food provider since the expense is so minimal and the goods are easy to replenish.

Sintel Systems is the only full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shops, pizzerias, sushi restaurants, cafés and retail stores.

As a single source for business solutions, our experienced, knowledgeable team negotiates the complex POS landscape for you to enable you to find the right POS system for your business and budget. HardwareSoftwareSupport

Questions or Comments: Contact us 855-POS-SALES

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