EXECUTIVE WHITE PA P E R
They can be branded, personalized, and
customized. And they offer administrative
benefits such as usage tracking and a
variety of redemption options.
The gift certificate and card industry
continues to gro w, both in consumer
and business-to-business markets.
Between $42 billion and $45 billion in
gift certificates and cards will be issued
in 2003, according to the Boston con-
sulting firm Bain & Co. Use of card s
and certificates to help build incre m e n-
tal sales in particular is expected to
expand. According to the 2003 Incentive
Federation Study of Merchandise and
Travel Incentive Users, buyers of incen-
tives say gift certificates and cards will
be their number one choice for sales
incentives in the future .
Despite the simplicity of gift cert i f i c a t e s
and gift cards, the variety of options re q u i re s
an understanding of a few basic terms.
n Gift certificates: These are vouch-
ers with dollar or point values embossed
on them. They can be personalized with
the recipient’s name and giver’s logo and,
depending on the vendor, can be replaced
in case of loss or theft.
n Gift checks: Sometimes synony-
mous with gift certificates, gift checks
usually refer to money orders issued by
banks or credit card firms.
n Gift cards: These plastic cards
come with a magnetic strip and/or bar
code preloaded with a dollar or point
amount. Some are reloadable (in which
case they are sometimes called debit
cards); others are not. They are generally
available in two types: 1) those that carry
a major credit card brand and are
redeemable at any merchant accepting
the brand; and 2) merchant-specific
cards, such as those issued by well-
known retailers. These are redeemable
only at the issuing merchant.
n Debit cards: These are redeemable
only at participating merchant outlets.
n Virtual certificates: Many gift cer-
tificates can be delivered via e-mail direct-
ly to the recipient’s mailbox, saving time
and the expenses of printing and delivery.
The “virtual certificate” can contain a