REWARDS AND GIFT CARDS

Would you like to make money by spending money? Or fly for free? These offers are enticing, which is why so many consumers have switched from traditional credit cards to rewards cards. A rewards card is a credit card that entitles the cardholder to seemingly endless amount of benefits. Card-issuing banks offer rewards cards to customers as a way to give customers further motivation to utilize their cards more fully. Some of these cards offer cash back for every dollar spent, or a customer can earn points toward purchases, or get a discount at certain hotels, restaurants, and gas stations. These are great incentives to get consumers spending, which in turn helps merchants earn revenue. According to www.creditcardlowdown.com, a site posting information for merchants and consumers about credit cards, "32 million customers in the United States are using rewards cards, and that number is rising every year."

Since so many consumers are using rewards cards, we'd like to better explain the rates and fees charged. Each time a merchant swipes a rewards card, it can process at either a mid-qualified or a non-qualified rate. The mid-qualified rate applies to traditional rewards cards that are swiped at a retail setting. The non-qualified rate applies to all rewards cards that are keyed in by manually entering the data into the Point of Sale (POS) system. Although the discount rate is higher than the traditional swiped card rate, it is well worth the cost. According to www.usa.visa.com, customers that are using a rewards card are traditionally spending 30% more than non-rewards cards because of the benefits they receive. That is a very large percentage, and merchants are reaping the benefits.

A rewards card works the exact same way as any other credit card. When key-entering a card, always enter the Address Verification System (AVS) information into your POS system. This helps prevent fraudulent activity, and will result in less chargebacks and identity theft issues. If your system does not prompt for AVS, call our 24-hour customer service line at 800-789-8897. They will add this feature to your system. For the best rates for swiped cards, make sure your system is settled within 24 hours, and that you obtain the signature of the customer on the receipt. Rewards cards are a great new development from card-issuing networks. With the number of consumers using rewards cards increasing each year, merchants are likely to see a large revenue increase as a result.

Sources:

http://www.creditcardlowdown.com/american_express/index.html

http://www.usa.visa.com/business/?it=gb|/|Small%20Businesses%20%26amp%3B%20Merchants