Smart Transaction Systems Releases 2008 Small Business Gift Card Study
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Smart Transaction Systems Releases 2008 Small Business Gift Card Study

New study provides valuable insight into the strength of small business gift card programs during uncertain financial times.

November 24, 2008 — According to a recent study conducted by Smart Transaction Systems, a leading provider of gift card systems for small businesses, less than one-tenth of a percent of small businesses charge inactive or dormancy fees on their gift cards, and 97 percent of gift cards issued by small businesses are good for a period of 5 years or more.

The Smart Transaction Systems 2008 Small Business Gift Card Study covered just over 4,500 merchant locations nationwide with a total of 1.1 million gift cards issued. The average merchant in the study is a small business with 3.3 stores or restaurants. By industry, the merchants in the study were 37% restaurant/hospitality, 34% retail, 8% Salon/Spa or fitness industry with the remaining 21% in other industries.

In the wake of failures of several large retailers, consumers are more concerned than ever about purchasing a gift card from a merchant that may go out of business. However, only one of the 4,500 small merchants in the study has gone out of business.

“Of all the small merchants in this study, only two charge dormancy fees on gift cards that have not been used for an extended period of time, and one of those two will immediately refund the fees upon request,” said Ray Clopton, President of Smart Transaction Systems. “We see a strong focus on customer satisfaction among small business owners. The numbers show that purchasing a gift card from a small, independently owned restaurant or retail store tends to be a more consumer-friendly experience, from both a financial and customer service perspective, than consumers might expect from a large chain, mall or credit card company,” added Clopton.

Smart Transaction Systems has consistently found that gift cards are most popular as a last minute purchase. The 23rd and 24th of December are the busiest days of the year for gift card sales.

The study also found that the average person purchasing a gift card from a small business places close to fifty dollars ($48.99) on the card. The average small business in the study has sold 1,531 cards. This ranges from “Mom-and-Pop” businesses with very few cards in circulation to a 6-location Salon & Spa with over 65,000 cards issued.

“We always remind small business owners that including informative signage with their gift card display units can be very effective. If you have consumer-friendly gift card policies, such as no expiration dates and no inactivity fees, that’s an important advantage that your customers should know about,” said Stephanie Kroner, Director of Merchant Relations at Smart Transaction Systems. “According to our study, 91% of small merchants do not have an expiration date on their cards,” she added.

Merchants or resellers interested in using STS gift and loyalty programs can obtain more information by contacting STS at 888-494-9760 or visiting