Industry News

08/12/2009 - Gift cards have already emerged as a bright spot for retailers - or at least ones with a merchant account that can process prepaid cards - as studies have shown that consumers intend to purchase more gift cards this holiday season, and that accepting gift cards can help boost a retailer's bottom line.

But to get even more mileage out of this trend, Canadian retailers may want to offer incentives for gift card purchases, according to a new study.

In a survey released this week, CashStar reports that 88 percent of consumers said they would be more likely to purchase a gift card that has an incentive or special offer attached, a strategy that has become popular recently as retailers try to make the most of the holiday shopping season.

While some businesses may be hesitant to add extra offers or incentives to the mix, the results may be seen in the merchant's bottom line - a recent study from Iowa State University, Boston University and the University of British Columbia found that consumers paying with gift cards spend more money than those using other forms of payment.

Businesses whose merchant services do not include gift card or prepaid card processing may want to talk with their payment processing provider about upgrading their POS terminals to take advantage of this trend.