Vetting a Gift Card Vendor: Five Questions to Ask (and Why)

There’s more than meets the eye when it comes to merchant gift cards, so when it comes time to produce them, there are many things to take into consideration beyond just the design of the card.  It’s fine and dandy if you can design a card that entices consumers to purchase it, but if that card does not function properly at checkout, then you have a much larger problem on your hands.  This is why vetting a gift card supplier is extremely important.  You’ll want to use a vendor that is experienced, process-driven and employs checks and balances to ensure, not only card quality, but functionality as well.  We have put together a list of questions that you should ask before choosing a vendor (and why).

The Big Five:

Having more than one production facility is beneficial for a number of reasons.  Depending upon the locations, you can save time and money on shipping if the facilities are centrally located.  Having duplicate facilities also allows for more capacity and can serve as a back-up for any emergencies that may arise.

Knowing your vendor’s card capacity can help you decide whether or not they are a good fit.  If you need to produce 100,000 gift cards for your third-party distributor and need them completed in a matter of weeks, the vendor’s monthly capacity numbers will give you an indication of whether or not the vendor can meet your deadline. A large capacity doesn’t always equate to quicker turn times however.  Depending upon the workload and number of customers (especially during peak production season), a vendor’s capacity could be easily maxed out, especially if they only have one facility.

Sometimes, less means more, which is why we (at CPS Cards) assign one project manager to oversee each production program.  The rationale is that this one person serves as the customer’s advocate and advisor and understands the entire project from start to finish.  Also, the customer doesn’t have to worry about who to contact when they have questions or changes on an order or to a proof.  A one-point of contact system allows less room for error and helps clients sleep better at night.

There is nothing more important than card functionality.  After all, if the card looks pretty on the display, but doesn’t work at the checkout, the consumer will form a negative opinion about your brand.  The proper functioning of gift cards lies in the encoding of data onto the card’s mag stripe or barcode.  To ensure this is done properly, the card vendor should utilize a quality management system (QMS) and a quality control system.  A QMS is a formalized system that documents all the procedures and steps necessary to achieve the end result – in this case, a functioning gift card. By documenting all procedures, the QMS helps guide the workforce, even if there is some employee turnover, by providing detailed information for each process.  A quality control system (different from a QMS) employs a series of validation techniques, such as camera verification, which monitors quality and accuracy during production. If a vendor does not have both of these systems in place, the likelihood of errors increases.

Knowing who and how many customers the vendor is servicing can answer a few questions that may be floating around in your head.  First of all, do they work with companies of your size?  Knowing this will help determine whether you will be a little fish in a big pond (low priority) or a big fish in a little pond (high priority).  Knowing who the vendor has on their client roster will help you determine if they have the acumen and credibility to produce your cards.  Keep in mind that some companies sign non-disclosure agreements which forbid vendors from sharing their name.  In this case, the vendor should be able to share program details without naming names.  And knowing a vendor’s client retention rate will give you an idea of how well of a job they do.

In summary, while there may seem to be dozens of gift card vendors, only a handful actually encode gift cards (you know, the important part we talked about in #4.) These companies are among the most experienced, as they work behind the scenes for multiple card production vendors. So, as previously stated, there is more than meets the eye with gift cards.  Asking the right (and detailed) questions during the vetting process will help you to make an informed decision the next time you need to order gift cards.