Being a small business owner means looking for creative ways to draw in new customers. One of the best methods for doing this is offering monetary incentives like gift cards. But how difficult is it to incorporate gift cards, and how does gift card processing work for small businesses? Let us help you answer those questions with this quick and easy guide!
Open Loop Cards
Open looped card systems typically include the involvement of a large bank. Customers swipe their gift cards at small businesses and will then disclose how much money they’d like to add to the card. From there, funds go to a larger financial institution, where they stay until the customer calls to activate their card. Once activated, the customer is free to use the funds on the card however they like, as open looped cards allow users to access their funds from numerous shops where major credit cards are accepted. So, if you’re looking to give your customers a variety of options, an open looped card system might be the best choice for your business.
Closed Loop Cards
On the other hand, closed loop card systems don’t allow customers to choose where they spend their money. Instead, through this payment process, the funds are withheld by the business owner when a transaction happens. This gift card process will allow your customers to use their gift cards to purchase products, services, or items in your storefront only. So, if you’re looking for a way to promote your small business and draw a broader range of customers into your establishment, a closed loop card system will allow you to do just that. So, it’s an option worth considering.
The Benefits of Gift Cards
No matter which type of gift card system for small businesses you choose, offering your customers gift cards comes with several benefits. For instance, they can cultivate regular customers while bringing in new ones, as you are providing direct incentives for people to shop at your store. Just as well, any balances not spent in your store will still belong to you, so you’ll never lose money. More often than not, customers will spend more than the balance on their card, so gift cards are a clever way to upsell, too.
When it comes to attracting new customers, adding incentivizing features like gift cards is an excellent choice. Hopefully, our quick guide helps you answer those nagging questions like “How does gift card processing work for small business?” so you can start using them for your business!