A retail management system must make sense of more than just
dollars. It must also be able to understand other emerging forms of payment,
such as mobile apps, mobile scans and those ever-popular gift cards.
Electronic gift cards are a payment
method more customers use during and after the holiday season. With this form
of payment, retailers must consider not only how their retail POS solution
scans the card, but also how the retail POS accounting mechanism tracks the
card’s spending limit, how much of the gift card to accept as tender and the
process to get the cash from the gift card.
The latter of these — getting the
cash from the gift card — will depend on who is managing the program. If you,
as the retailer, manage your own gift card program, you’ve already collected
the money. But when a third party is managing the gift card, you may not immediately
receive payment for that transaction. Instead, you will have to bill someone
else.
Knowing how your POS system handles
these transactions can help you decide how to best manage your store’s gift
card program.
When you manage your own gift card
program, you collect the money up front, but you still need to know when the
card is used and its remaining balance. You can manage that within your retail
management system or have a third-party vendor track the balance. If you manage
the program yourself, you have to be assured that your system prevents the gift
card from being used beyond its spending limit. If you have multiple stores and
each store has its own database, how is it communicating the gift card balance?
If an external third-party company
manages your store gift card, you rely on them to track the balance. You won’t
know each card’s remaining balance; your system only knows that you have $1,000
in gift card purchases. But then again, you already have the cash.
Now let’s say your retail location
is within a shopping center and the mall management sells a gift card that can
be used at any independent shop within the center. When a customer uses a
shopping center gift card at your store, you probably won’t receive the cash
right away. This gift card works like a voucher or a manufacturer’s coupon in
that you rely on a third-party company to track the gift card balance, but you
will also have to bill them to get the cash.
Unlike credit cards, many gift cards
do not require the physical presence of the card at the POS station. For
example, when a customer uses a credit card, the retailer pays a lower merchant
fee if the card is physically present; a customer swiping the card into the POS
system proves that. If the credit card number is typed in, the merchant fee is
likely slightly higher because that method doesn’t prove that the card was
physically present.
With gift card transactions, the
card’s unique identification code can be entered to perform the transaction.
Your retail management system should be equipped to gather gift
card information from various mediums, such as a smartphone touchscreen or a
printed Quick Response (QR) code.
Nearly everyone these days carries a
smartphone, which is equipped with apps that make it easy to carry multiple
store coupons or to digitally retain other forms of payment. These “digital
wallets” are about carrying less but having more information — and more payment
methods — at consumers’ fingertips. As a result, your retail management system
must be able to adapt to emerging types of transactions, including electronic
gift cards that will be especially popular around the upcoming holidays.
