Giving and redeeming

Gift certificates can be a multichannel challenge Retailers and catalogers know that gift certificates and discount coupons can convert prospects, boost order sizes, and spur repeat business. Some marketers are now using coupons to drive traffic to their Websites. For instance, online beauty products marketer Reflect.com is using catalog insert programs to include discount coupons in packages mailed to catalog buyers, though the company won’t disclose which catalogers it is working with.

But for multichannel marketers, offering – not to mention redeeming – certificates can be challenging. For instance, if a customer wants to make an online purchase using a gift certificate printed on paper, you can physically take the certificate from him as a means of ensuring that he doesn’t use it again.

“Savvy multichannel retailers are interfacing point-of-sale call centers and online order systems to support centralized gift certificate processing,” notes Don Endres, vice president of Internet-stored value services at CyberSource, a Mountain View, CA-based e-commerce transactions services provider.

Building such a centralized system can cost tens, if not hundreds, of thousands of dollars. But Endres says that a few multichannel merchants rely on simpler methods to redeem certificates, such as having telephone reps use a browser-based support screen to verify and apply customers’ certificates and coupons. In stores, merchants call in redeemed gift certificates to the customer service support center.

Presenting the online certificate Electronic certificates and coupons, which are e-mailed to the recipients, are easier to redeem. The information is already online, and if a customer wants to redeem an online coupon in a store, all he has to do is print it and present it.

And in terms of presentation, online coupons and certificates have come a long way. Simple text-based gift certificates will likely never go away, since many e-mail systems don’t support HTML, or graphical, messages. “But graphical certificates have great gift value and leverage brand extension, and therefore are more compelling than text-based versions,” Endres contends. “Consumers receive esthetic offline promotions, and they need similar online ones to motivate them to buy.”

General merchandise marketer Spiegel only recently began offering electronic gift certificates, as corporate incentive programs, although the Downers Grove, IL-based company has had a paper gift certificate incentive program in place since 1987.

“We’ve just got the electronic side of our rewards program nailed down,” says director of business development and promotions Scott Weiler. Spiegel is now preparing to offer business-to-consumer electronic certificates in HTML and text formats. “Our plan is to get our electronic gift certificate program up for the 2000 holiday season,” he says.

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