In addition to the different types of programs, there are other points to keep in mind when developing a gift card system.

Gift card design
Most gift cards are the size of a credit card. This allows customers to easily carry it with them wherever they go and also keeps your corporate image fresh in their minds. You can customize the design of your gift cards, or select from a template. You'll want your gift cards and their holders to be attractive, but you should avoid overly elaborate patterns and busy color schemes that detract from your company's logo or message.

Gift card technology
Magnetic stripe cards, or mag stripes, are the most common type of gift card. Mag stripes work with most credit card terminals and can be used with a PC by adding a card swiper. Keep in mind that you are limited to keeping the card design to a certain size — usually the length of a credit card — so it can be swiped through a terminal for activation.

A bar coded gift card allows you to experiment with any size card that can hold a full bar code. A common example is plastic tags that fit on a keychain. However, barcode cards require you to use a scanner or reader to activate them. If you don’t already own one, you’d need to purchase one to use bar coded gift cards.

For franchise businesses with multiple locations, you can use smart card technology that stores the account information into an embedded computer chip instead of a central database. Smart cards require special card readers that are quite expensive. The lack of current standards and supporting infrastructure make smart cards a less than ideal option for most gift card systems.

Gift card activation
If you want to activate gift cards quickly and conveniently, credit card terminals work best. Most businesses already have terminals and they're the least expensive option for getting started with a gift card system. However, you'll have to pay fees each time you activate a gift card or when a customer redeems one.

If you choose to use a PC-based system, you avoid transaction fees and gain control of all your data, but will pay several hundred dollars more up front. In addition to software, you may also need additional computer devices such as a special attachment for a keyboard or monitor for swiping the gift cards. PC-based systems also require staff to manage the software and run reports. Costs continue post-purchase, too; some vendors may require additional fees for software upgrades when they are released and for an additional supply of cards.

You do have a third option: ASP activation. When you need to activate a gift card, you access a web site, enter the number on the back of the card and the value to be added, and hand it to the customer. The advantage is that the provider does all of the management. However, most businesses opt for a terminal or POS solution because of the familiarity with their existing processing equipment. They also don't want to compromise sales and transactions if their Internet connection goes down.

Online registration
Gift cards are bearer instruments — if people find a lost or stolen card, they can use the value. One way to protect your customers' security is to suggest that they register their gift cards so they can retrieve remaining balances and request replacement cards. You can either do it for them at the point of sale or direct them to your company web site or 800 number to do it from home. It's an additional measure of security and protection and lets customers feel that they are still using a safer alternative to cash.