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The National Retail Federation (NFR) has recently released a new study that indicates gift card interest among consumers continues to rise. The study reports that consumers will purchase more gift cards this year as compared to 2009. The average amount spent this year is up 4% to $41.48 and it is estimated that 77.3% of all American shoppers will purchase at least one gift card this holiday season.  

Gift cards continue to be one of the most popular and most requested items. With such popularity it is surprising that more merchants don’t offer gift cards at their businesses. This may be a function of the perception of many merchants that only large retailers or big box stores can offer gift cards. This is not true as it is very easy and inexpensive to implement a gift card solution.

So what are the benefits of offering gift cards?

1. Money Upfront: Money is received upfront with product and service fulfillment at a letter time.
2. Customer Loyalty: Gift cards ensure repeat business as the patron will likely return to redeem the card.
3. Increased Customer Base: Most gift cards will be given to friends, family, colleagues or acquaintances, furthering business brand awareness.  Additional patrons give you the ability to build on these relationships and forge future business.
4. Word-of-Mouth Marketing: Gift card purchases represent an endorsement of your products and services. Most customers that purchase a gift card are excited about the product an service and want others to experience it.
5. Purchases Above Face Value of the Card: Studies show that customers typically spent more than the face value of the gift card.
6. Lack of Redemption: Not all gift cards get redeemed which results in more revenue toward your bottom line.

Interested in getting a gift card program started? Let us show you how.

Issuing banks have finally begun to side with merchants over chargeback fraud commonly called ‘Friendly Fraud’. Friendly fraud is the practice of a consumer making a purchase and then claiming that “it wasn’t me” in effect stealing from the merchant and bank.

It has been reported by Lexis Nexis that nearly 23% of fraud losses reported by merchants are a result of friendly fraud. As the economy continues to correct the prevalence of this type of fraud is likely to increase. The main reason – it’s easy to commit and get away with.

Most banks advertise that fraudulent charges will be hassle free with zero liability for the consumer. However, the increase in friendly fraud is forcing issuing banks to look into claims in much more detail.  When the consumer claims fraud they call their credit card issuing bank and claim they did not make the purchase in question. At that point the chargeback process begins.

The chargeback process is the banks evaluation of the claim to determine who is telling the truth. Both sides present their evidence and a re-presentment is issued in which the result is rendered. Some banks are now requiring consumers to provide notarized affidavits pertaining to the claim. If the consumer wins, the money is refunded to the consumer and revoked from the merchant. If the merchant wins the money is awarded to the merchant. According to Julie Fergerson at Ethoca.com, a fraud prevention firm, banks are siding with merchants much more often lately.

In addition, according to the annual Merchant Risk Council survey, the “win” rate for merchants is up 14% from 3 years ago.

How Can You Protect Your Business From Friendly Fraud?

1. Always get a signature for the purchase
2. If your business is shipping products,  require a signature upon delivery