Blog Assignment # 2
"Plastic Never Looked So Good"
Hospitality Upgrade Magazine
Kasavana, Michael L. Plastic never looked so good. Retrieved September 28, 2007 from, http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=92
One way of implementing the self-service trend that has increased over the past five years in the hospitality industry is through gift cards. Today’s hoteliers and restaurateurs are using POS systems that are capable of supporting electronic cards, magnetic strips, and bar coding authorization. Gift card processors need to be able to interface with the business’ POS system. By interfacing with an already-standing POS system, the processor can provide a website that cardholders could use to track their purchases. And, the service provider can see what types of purchases the card holder made allowing purchase behavior and trends to be analyzed. Another main role of the processor is for security reasons. The company who issued the card can see real-time account activity which can help eliminate fraud and theft. Also, some companies are able to redeem lost gift cards if consumers have the original receipt. Each hotel or restaurant should have a gift card processor that handles not only transactions, account balances, and customer data, but also the activation of new cards, increasing the value of existing cards and redeeming purchases. Most recently, Web-based services entered the hospitality industry allowing gift cards to be bought and sold through “multiple distribution channels.” Through these various channels, whether it be on-site, online or through a third-party, more people are exposed to the brand name and new customers and higher revenues could be a result.
Although gift cards have been in the hospitality industry for a very long time, the fact that companies are just now realizing their gift card processors should be interfaced with their POS system is a little strange. The benefits of interfacing obviously include better customer satisfaction (since customer purchasing trends can be followed) and more personalized services. Customers can go to the establishment, go online or call for help about their accounts, balances and security concerns. Since gift cards are customizable with names, colors and templates, they are no longer considered impersonal gifts and the hospitality industry should realize that the target market for gift cards is huge. With their increased use over the past couple of years, especially through third parties, like Wawa, many companies would be foolish to not have a gift card technology implemented into their systems. By interfacing with their POS systems and using multiple channels to get their name into the market, the companies can fully reach all potential customers. Although this type of technology is a very small aspect of a hotel or restaurants business, it’s the one way a company can definitely increase their competitive advantage.
5 comments:
This article confuses me a little. I do not understand why hotels would not already have a gift card system implemented that could do all that was previously mentioned; make transactions, keep account balances, store customer data, and activate new and old cards. It does not seem hard to have a POS system interface with a gift card processor. Maybe, since my generation has grown up with gift cards, I am confused because there seems to be such a proliferation of them. I remember getting my first gift card to Coconuts Music Store and I thought it was just the coolest gift ever since I could pick what I wanted to get. That must have been in about third grade, so it is quite apparent that these cards are not a foreign concept. I can understand the usage in stores and restaurants, but not really in hotels. I cannot see why anyone would get someone a gift card to a hotel unless, maybe, there was an amazing spa or other facilities that were offered. I will be interested to see if the usage of gift cards increases, in what aspect of the hotel it is best being utilized and how many properties use it as a profit center.
This is interesting. I think last Christmas, there was a global issue with Gift Cards. When you get a gift card for Christmas, you must use it immediately. Some consumers assume that there is no expiration date on them. If they don't use their gift cards immediately, they would lose all their "cash" and it wouldn't be redeemable anymore. In other case, the plastic card will lose its value.
I agree with A.J. that gift cards have been common around merchandise stores like Walmart. But hotels, Restaurants and other types of businesses need to better manage their gift cards.
I completely agree with Mallory, hospitality professionals should have interfaced their systems with gift cards long ago. With the capabilities of today’s technology it seems a bit redundant to have gift cards for hotels rather than conventional measures like gift cards at retail stores.
Since gift cards are customizable with names, colors and templates, they are no longer considered impersonal gifts and the hospitality industry should realize that the target market for gift cards is huge. With their increased use over the past couple of years, especially through third parties, like Wawa, many companies would be foolish to not have a gift card technology implemented into their systems.
By interfacing with their POS systems and using multiple channels to get their name into the market, the companies can fully reach all potential customers. Although this type of technology is a very small aspect of a hotel or restaurants business, it’s the one way a company can definitely increase their competitive advantage.
I totally agree that gift cards are becoming very common nowadays. It is easy to find it in every place. Instead of using it only as a stored-value card, it is a trend that many companies interface the gift cards with their POS system now. Through POS system, I think the main advantage of the companies is they can track the buying behavior of their customers easily. In other words, the companies will know the preference of their customers very well by the data collection. Therefore, they can provide a more personalized service to satisfy the customers and enforce their loyalty to the company.
Gift cards often have a bad rap. some love them because they are expected to shop at the last minute and often don't really know what to get that special someone. Others find them impersonal and offensive. I think that gift cards are the perfect gift for anyone because it really lets them decide how to use it. On a business note they are an excellant marketing tool because the person that bought the gift card likely told 3 or so people, then the reciever probably told 6 more. In addition to this, often recipients of these cards take another party of people. Since they aren't paying completely of pocket for the meal, they are easily upsold on bottles of wine or extra martinis and desserts. A few of the restaurants i have been in lately put a pamphlet on the inside of the check book containing an advertisement in giftcards. that is a great last chance sale.
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