Square Canada has launched a new gift card service aimed at small businesses that can’t (or don’t want to) get into the convoluted game of gift card sales and redemption.
The service is available to any business that uses the Square Register mobile app to take in-store customer payments. From the online Square dashboard, store operators can create branded gift cards using a design template or their own submitted graphics.
Square then prints and ships the gift cards for the retailer to sell, either in-store or online. The cards can be immediately read by Square Register, without the need for expensive specialized card readers or POS software updates typical of gift card programs.
Winnipeg-based menswear retailer Eph Apparel was one of the first Canadian companies to pilot-test the product. Up until November last year, Eph offered cardstock-printout gift certificates, but they were never big sellers, said co-founder Andrew Parkes.
The switch to swipeable, professional-grade plastic cards made the idea of buying them for friends seem a lot more legitimate to customers, Parkes said. After rolling them out in November, Eph’s gift card sales rose 250% through the holiday season.
Parkes said Eph looked into getting retail-standard gift cards before, but it just wasn’t realistic.
“It involved secondary card readers, having to buy extra machinary and software,” he said. “A lot of these companies offering it were based in the United States, and some of their stuff didn’t work in Canada. So you couldn’t use debit to purchase them, for example.”
A big selling point for Square’s cards are the straightforward price structure. The company charges a flat rate of U.S.$1-$1.50 per card, depending on the quantity ordered. There aren’t any monthly fees, software fees or redemption fees.
When cards are bought and activated, the amount purchased is deposited directly into the store owner’s account, like a normal store purchase — rather than being held by a third party until the card is spent.
“We love the idea that we get the money immediately. We can keep track of balances, and we don’t have to worry about forgeries,” Parkes said. “It creates a much more seamless process for redemption for the customer as well.”
“Gift cards was one of the most requested features from our Canadian sellers,” said Jenny He, communications lead for Square Canada. “We’re really committed to bringing our best tools and features to our Canadian sellers.”
The gift card service first launched in the U.S. in November last year.
