Industry News

20/01/2010 - For small businesses, it can be difficult to keep business local in the face of competition from malls and large chains. Fortunately, the right payment processing solution can help.

Several community organizations are experimenting with community gift card programs, in which consumers purchase prepaid debit gift cards that can only be used at local businesses, the Get Debit blog reported. This keeps consumers shopping at local stores instead of large chains.

Also called "downtown gift card programs," the concept is being used by communities in Boise, Idaho and Boulder, Colorado, though it has the potential of catching on in other areas across America and Canada.

The cards are typically sold through the town's chamber of commerce or other central community organization, and can only be used with participating merchants (which must enroll in the program beforehand).

The Boulder gift card program sold approximately US$200,000 of gift cards in 2009, the blog reported, and now has 170 participating merchants.

In addition to bringing in more business, the program is also advantageous to businesses with merchant accounts because it requires no special POS terminal or payment processing infrastructure.

Gift cards played an important role in the holiday shopping season this year, and are still an attractive strategy for merchants as consumers have been found to spend more on gift cards than they would otherwise.