The Gift of New Customers through Gift Vouchers

Part 4 – What do you need on your Gift Voucher and Card

You’ve reached the penultimate part of our five week series of articles on gift cards and vouchers. We’ve covered the research on the use of gift cards and vouchers (part 1), seeing if it’s right for your business (part ), and making them part of your business (part 3). Now we are going to look at the practical side of it, what you need to have on your gift card or voucher

In this article I will be covering the basic things you need to have on your gift voucher to make it usable for both you and your customers. I won’t be covering any design aspects as this will depend on the system you will be using to supply them (POS, Online, manual) so that area is best suited for its own article.

Serial Numbers

Every voucher and card needs a tracking serial number. While we have printed vouchers for clients that don’t have them, we consider that to be adding extra risk and effort in managing your voucher system. For Copy Express adding serial numbers takes very little time and only adds a job charge to the product. The numbers can be anything you like, though you may not have a choice if it’s being automatically generated by your POS or Online systems.

Information Collected

Allowing for the limits imposed by the Privacy Act, you can still collect some basic information for tracking vouchers. It’s especially handy if a customer loses a voucher, as you have that information on hand to be able to honor it or issue a new one. If there’s more than one person in the business that can issue a voucher you’ll need to have that recorded too for security. So the most common information recorded is

• The minimum is
  • Who purchased the voucher
  • When it was purchased
  • Who issued the voucher if there’s more than one person who can issue it.
  • The value if it is one where you write the value in manually
• You can also include
  • Purchasers contact information be it phone or email
  • Who is getting the voucher
  • Recipients contact information be it phone or email
  • Expiration date if you don’t have a fixed period

By grabbing the contact information for both the purchaser and the recipient you could include them in your marketing database for future promotions. We would recommend getting permission from them to do so first, and most people are fine with that as they know they have the right ro refuse.

Expiry dates

New Zealand has no minimum expiry date for gift vouchers in government regulations. The  market standard is 12 or 24 months. For some clients we have seen them as short as 6 months while others have no expiry date on their gift cards or vouchers.  In Australia the minimum is 36 months, as that is set by government regulations. According to Consumerprotection.govt.nz, there is no maximum expiry date either, so if no date is given on the voucher then it doesn’t matter how old it is, it must be honoured by the business. Our recommendation is at least 12 months if you’re in a business that your client would visit frequently (at least every 6 months), and 24 months otherwise. Another thing to do is offer a grace period for expired gift vouchers, or offer to reissue them with a new expiry date. Doing that will make you look much better in the customer’s eyes and it’s not like you haven’t got the money already.

Terms and Conditions

NZ law in the matter of gift vouchers / cards when it comes to their use are a bit vague. While they are treated like cash in their usage, because they are a private contract between your business and the customer, you set any terms and conditions you like and the customer agrees to them when they purchase the voucher. In the purest sense a gift voucher is ‘cash you are holding for the customer’ which makes is a ‘liability’ on your banksheet so the customer can reclaim that money any way they want. Still, there are common terms and conditions you can put on a gift voucher to prevent abuse of them. You don’t have to have all of them printed on the voucher or card (with the exception of the first and second ones) as long as it can be seen on your business’s website or as signage somewhere in view in the store or office, you’re covered.

• ‘Can not be exchanged for Cash or Credit’
  You want the customer to spend that money so you need to include that line. It also prevents the situation of money laundering, such as someone using a stolen credit card to buy gift vouchers to ‘wash’ the money and get out harder to trace cash. While it’s not common in NZ, it does happen. This is generally the one exclusion I recommend being printed on the gift card or voucher to ensure that they can not claim they didn’t know about it.
• ‘Full Terms and conditions can be found at…’
  Unless you want to cover your voucher or card with a whole lot of text, generally you don’t put every limitation on the voucher. As long as you provide information on how to find the T&C’s, in the office/store or more commonly these days on your website, then you’re covered.
• ‘Reserve the right to issue part or all change in the form of a gift voucher’
  You want people to spend the money with you, but you also want to limit how much cash you give out in change. Using the ‘part or all’ allows you to manage the cash flow and decide if the cost of issuing a new voucher is worth the effort for the amount of change given. My general rule of thumb is if there’s 20% or more of the voucher unspent, then issue a new voucher rounded down to the value of a bank note and give change for the rest of it.
• ‘Minimum spend value of $’
  This one can be tricky as you don’t want to prevent people from using the voucher but you also don’t want to spend time/money reissuing vouchers which is more than what was spent. Generally speaking it’s easier to use the previous ‘Reserve the right to issue part or all change in the form of a gift voucher’ and decide on a case by case basis.
• ‘No Change Given’
  Like the ‘Minimum Spend Value’ this limit is to ensure that you get people to spend the voucher and encourage them to spend more than the face value. While the law allows you to set any terms and conditions you like, I feel that presents a disincentive to people purchasing the voucher. Unless you are issuing fixed value vouchers which can be spent like bank notes, not getting change can discourage the customer from  spending it. We’ve talked about the problem of unspent value left on gift cards/vouchers back in the first article on the subject. Consumerprotection.govt.nz states on it’s page on gift vouchers that you are not required issue change on the voucher if you state that on the voucher terms and conditions.
• Replacement of lost voucher / card
  You are under no obligation, according to the law, to replace lost vouchers, as they are considered to be the same as cash. To maintain customer good will for your businesses repuation to offer replacements if a voucher is lost before it is spent. That’s why you should get the purchaser’s and/or recipient’s contact information at time of issue, to simplify the process. This allows you to cancel the lost voucher and issue a new one with very little effort.
• ‘Clearance and Specials Excluded’
  I’ve seen vouchers with this wording put on it and I feel it comes across as anti-consumer. They have the right to spend it on anything they want, so you can’t exclude anything from that.
• ‘The business reserves the right to exclude the use of the voucher on a case by case basis’
  While it might not be worded exactly like that, you still see vouchers say things to that effect. Like the previous point, you can’t exclude anything from being paid for by vouchers. They have given you the money already so they can choose to spend it on anything they like.
• Fees for issuing or using the Voucher or Card
  NZ law in the matter of gift vouchers / cards when it comes to fees for their issuing and use are a bit vague. Generally speaking there should be no charge for issuing or using a paper / card voucher, if you are using a debit style preloaded card then its acceptable for it to have charge for loading / using it. While you are legally allowed to charge fees for voucher / card usage, the point of gift vouchers is to get and retain new customers. You want them to have the best experience using the voucher so don’t charge them for using the voucher.
  

That is it

All the vital things you need to know about setting up your gift voucher or card. Next up will be the final part, doing the actual design and how to work around the limitations of your system if you’re using POS or Online voucher systems.

Need help with getting your Gift Voucher or Card system setup? Looking for inspiration on how to make it a wow item that is an easy sell? Talk to us at Copy Express and we’ll get you sorted with everything you need to make it work

Links

https://www.consumerprotection.govt.nz/general-help/ways-to-buy-and-pay/gift-vouchers-and-pre-loaded-cards/