Why Gift Card Solutions Should be an MSP’s First Value-Added Service

Many retailers are looking for updated systems that give them omnichannel functionality and the ability to differentiate their businesses.

Gift card solutions have been around since the 1990s. Many retail and restaurant businesses, from the largest enterprises to small, independent businesses, sell them to make gift-giving easier or to give customers an alternative to carrying cash.

Justin Zeigler, Director of Product and Marketing at Datacap Systems, points out that although the space is crowded, there’s ample opportunity to sell modern gift card solutions. “Merchants are looking for new ways to engage with their existing and prospective customer base, and contemporary gift/loyalty platforms are an ideal starting point,” he says.

Zeigler explains that brick-and-mortar merchants are continually evolving to better serve their customer base. “For many, this includes engaging with their customers via an online/ecommerce presence that interacts seamlessly with existing in-store processes,” he says. “These merchants expect a gift card platform that can operate consistently across mobile and store-level payments solutions. This means that at minimum, the experience of the purchase, redemption and subsequent reloads of gift cards – virtual or otherwise – should remain consistent across mobile, online and brick-and-mortar payment platforms.” Additionally, as brick-and-mortar merchants continue to modernize through a web and mobile presence, the demand for e-gift cards – and omnichannel payments in general – will grow proportionally.

Beyond giving gift cards omnichannel functionality, Zeigler points out that merchants are also looking for ways to differentiate themselves from their competitors and build a loyal customer base. “For this reason, more merchants are opting to bundle gift and loyalty platforms that include CRM, targeted offers, proactive notifications, and advanced metrics,” he says.

POS Integration is Essential

Your customers need your expertise to ensure their gift card solutions share data with their point of sale (POS) systems. “Without integration into the POS, the merchant is relegated to an antiquated gift solution via a non-integrated terminal or online platform,” Zeigler says. “Gift sale transactions will have to be reconciled separately from the POS, which adds to end-of-day procedures and makes the POS reports less valuable for the merchant.”

He notes that, more importantly, nonintegrated systems can mean customer experiences suffer. “Non-integrated gift platforms often represent a wasted opportunity for merchants to truly connect with their customer base to drive customer loyalty and expand sales,” he says.

Leveraging Gift Card Solutions for Business Growth for Your Clients – and for You  

Gift cards are usually branded with a merchant’s name, logo, and colors. Zeigler says, however, “We’re seeing that successful VARs are taking an active role in brand marketing for their merchants. They’re offering gift/loyalty platforms that are enhanced to support proactive marketing and targeted offers based on purchase history and are often helping to manage those programs on behalf of the merchant as a value-added service.” As a result, merchants benefit from a sales lift generated by modern marketing outreach campaigns, and VARs or MSPs create new revenue opportunities via additional value-added services. 

“VARs and MSPs should be adding value-added services to their offering to create new revenue opportunities while simultaneously justifying their position in the merchant’s ecosystem,” Zeigler says. “VARs have an inherently unique competitive advantage over direct-to-merchant POS providers in that they’re able to provide an on-site needs assessment from an industry expert’s viewpoint. VARs should be regularly evaluating third-party value-added services that have the propensity to provide real value to their merchant base.” He comments that when those services result in revenue growth or cost savings, the merchant will gladly pay ongoing “as a Service” fees to the VAR or MSP.

“Of course, the more services a VAR or MSP can offer to their merchant base results in a compounded expansion of recurring revenue,” Zeigler says, “but even more importantly, it maintains the merchant customer for a longer period of time due to the multiple service tie-ins that quickly become central to their business processes.”

“Gift/loyalty programs should be one of, if not the first, value-added services offered by VARs and MSPs to their merchant customers,” he says.

Mike Monocello

The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of Managed Services Journal (formerly XaaS Journal) and DevPro Journal.