DES MOINES, Iowa (2/21/08)--Credit unions shouldn’t wait another year to offer gift cards, even though the busiest holiday season has just passed, says a new white paper. The white paper, released Tuesday by The Members Group (TMG), covers a number of topics that include how to evaluate a gift card program, as well as how to market a program in other buying seasons. TMG is a card solutions provider for credit unions. All gift cards are not the same, the paper asserts, and credit unions should keep in mind a few factors when evaluating gift card programs:
* Reseller vs. Issuer. A reseller program is typically a generic solution that offers a limited selection of plastics, as well as opportunity for revenue. An issuer program involves more resources, but there is more opportunity for reward; * Interchange Income. How much is coming back to the credit union? Again the difference may be in choosing between a reseller and an issuer model; * Branding. When and how will the logo and credit union name be visible on the card? Many programs offer generic cards that may or may not permit a credit union to put its logo on the card; * Marketing support. Because a credit union’s resources are at a premium, look at what type of support the vendor offers; and * How does the overall program grow in the future?--Does the gift card partner provide both a reseller and issuer model? Does the vendor offer other types of products a credit union might choose to offer to its members?
“We continue to be surprised by the number of credit unions waiting for the right time to get into the gift card market,” said Joe Falk, TMG director of product development. “The right time really is now, even though sales will be significantly less than the holiday season that stretches from late November through the first of the year. “Credit unions need to establish their footing in the market as a place to get a great gift card product,” he continued. TMG understands that with limited resources available to launch new products, credit unions may be reluctant to enter the market before a product is established, Falk said. “With competition coming not only from banks, but also retailers, it is important for credit unions to stake out their market now,” he added.