How to Set Up a Gift Card Program For Your Franchise

How to Set Up a Gift Card Program For Your Franchise


Setting up a gift card program in a franchise system can be a lucrative and strategic way to boost sales, enhance brand loyalty, and drive foot traffic to your franchise locations. Gift cards appeal to a wide range of customers and provide convenience for both the giver and the recipient. In this comprehensive guide, we’ll explore the steps and considerations for establishing a successful gift card program within your franchise system.


I. Understanding the Benefits of a Gift Card Program

Before diving into the setup process, it’s essential to understand the potential benefits of implementing a gift card program in your franchise system:


A. Increased Sales and Revenue

Gift cards encourage spending within your franchise network. Recipients often spend more than the card’s face value when they visit your locations, resulting in increased sales and revenue.


B. Brand Loyalty and Awareness

Gift cards serve as a powerful branding tool. They reinforce your brand in the minds of customers, whether they’re purchasing or receiving the cards. This can lead to increased brand loyalty and awareness.


C. Customer Acquisition and Retention

Gift cards attract new customers who may not have visited your franchise before. Additionally, when recipients have a positive experience using the gift card, they are more likely to become repeat customers.


D. Cash Flow Benefits

When customers purchase gift cards, you receive payment upfront, even if the cards are redeemed at a later date. This can help improve cash flow for your franchise business.


II. Planning Your Gift Card Program

Before implementing a gift card program, carefully plan the details to ensure its success:


A. Define Program Objectives

Determine the primary objectives of your gift card program. Are you aiming to increase sales, boost brand awareness, or achieve another goal? Clear objectives will guide your program’s design and execution.


B. Choose Card Design and Branding

Design an attractive and on-brand gift card. The card’s design should reflect your franchise’s identity and appeal to a broad audience. Consider using your franchise’s logo, colors, and any relevant imagery.


C. Determine Card Denominations

Decide on the denominations for your gift cards. Offer a range of options to cater to different budgets. Common denominations include $10, $25, $50, and $100.


D. Establish Card Policies

Define policies related to gift card usage, including expiration dates, reloadability, and the ability to use the card across multiple franchise locations. Ensure these policies comply with local and national gift card regulations.


E. Select a Gift Card Provider

Choose a reliable gift card provider or vendor. Look for a provider that offers customization options, secure card production, and reporting features to track card sales and usage.


F. Implement Technology Solutions

Integrate the gift card program into your point-of-sale (POS) system. Ensure that franchise locations can easily sell, redeem, and check gift card balances.


G. Train Franchisees and Staff

Provide comprehensive training to franchisees and their staff on how to sell, redeem, and manage gift cards. Ensure everyone understands the program’s policies and procedures.


III. Legal and Compliance Considerations

Gift card programs are subject to various legal and compliance regulations. Ensure your program adheres to these guidelines:


A. Gift Card Expiration Laws

Many jurisdictions have laws governing gift card expiration dates. Make sure your program complies with these regulations to avoid legal issues.


B. Unclaimed Property Laws

Be aware of unclaimed property laws, which require businesses to escheat unclaimed gift card balances to the state after a specified period. Maintain proper record-keeping to track unclaimed balances.


C. Accounting and Reporting

Implement robust accounting and reporting systems to track gift card sales, redemptions, and outstanding balances. Accurate record-keeping is crucial for compliance and financial management.


D. Data Security

Protect customer data associated with gift card transactions. Ensure that your POS system and payment processing methods are secure and compliant with Payment Card Industry Data Security Standard (PCI DSS) requirements.


E. Tax Considerations

Understand the tax implications of gift card sales and redemptions. Consult with tax professionals to ensure proper reporting and compliance with tax laws.


IV. Launching Your Gift Card Program

Once you’ve planned and addressed legal and compliance considerations, it’s time to launch your gift card program:


A. Marketing and Promotion

Create a marketing strategy to promote your gift card program. Use various channels, including social media, email marketing, in-store signage, and your franchise’s website, to reach your target audience.


B. Incentives and Promotions

Consider offering incentives, such as bonus gift cards with the purchase of a certain amount or discounts for customers who use gift cards for their purchases during specific periods.


C. Gift Card Displays

Set up prominent gift card displays at your franchise locations to attract attention and make it easy for customers to purchase gift cards.


D. Online Sales

If applicable, allow customers to purchase gift cards online through your franchise’s website. Ensure the online platform is user-friendly and secure.


E. Staff Training and Education

Ensure that franchise staff are knowledgeable about the program, its benefits, and how to assist customers with gift card purchases.


V. Managing and Tracking Your Gift Card Program

Ongoing management and tracking are essential for the success of your gift card program:


A. Reporting and Analytics

Regularly review reports and analytics related to gift card sales and redemptions. This data can provide insights into program performance and customer behavior.


B. Customer Support

Offer customer support for inquiries related to gift cards, including balance inquiries, lost cards, and other issues. Ensure that customers can easily reach out for assistance.


C. Program Evaluation

Periodically assess the effectiveness of your gift card program. Are you achieving your objectives? Are there areas for improvement or expansion?


D. Reload Options

Consider offering reloadable gift cards, allowing customers to add funds to their cards and reuse them for future purchases. This can enhance customer retention.


VI. Handling Expired and Unredeemed Gift Cards

Over time, some gift cards may go unused or expire. To manage this aspect of your gift card program:


A. Expiration Policies

Clearly communicate expiration dates to customers. If required by law, consider extending expiration dates or offering partial refunds for expired cards.


B. Unclaimed Balances

Develop a process for handling unclaimed gift card balances in compliance with local regulations. Ensure that records are maintained for audit purposes.


A well-executed gift card program can be a valuable addition to your franchise system. It can boost sales, enhance brand loyalty, and attract new customers. However, success requires careful planning, compliance with legal regulations, and ongoing management and promotion. By following the steps and considerations outlined in this guide, you can establish and maintain a successful gift card program that benefits both your franchise locations and your customers.


For more information on how to structure your Franchise Model and how to grow your business through franchising, contact Franchise Marketing Systems (FMS Franchise): 



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