Store Financial

Franchise Gift Cards

Most gift cards that we are familiar with use a closed loop system for their cards that is specific to their stores. To do this, each retail location must have the same point-of-sale (POS) and the same banking relationship because all of the funding stays within their group. These closed loop cards don't use Visa or MasterCard network systems and avoid some fees to retain this control. But what if you don't own all the retail locations and you have franchisees that are independent businesses?

The same system we use for a shopping mall or downtown association works for franchise locations. In this case, instead of being connected by geography, they are connected "vertically" through a franchise. We set up their network the same way, making those connections irrespective of the point of sale hardware they use or the banking relationships. We use the Visa or MasterCard network to authorize transactions and settle those transactions just like a credit card or debit card. The difference is that we don't apply the Visa or MasterCard logo (because it's not useable everywhere) and the front of the card can be used to identify the franchise brand.

This has allowed clients that couldn't offer a gift card in the past to now offer one that is good at all of their franchise locations and doesn't require new hardware or software. It also allows some big box retailers that have a "store within a store" to offer a card that can be used at any of the merchant locations within that store, not just at their checkout lanes.