Credit unions face stiff competition on the gift card front from supermarket and convenience store gift card racks. But most of the cards sold in those outlets are closed-loop and can only be used at a particular retailer, says Jeff Falk, director of product development at The Members Group.
“They’re not as appealing as open-loop cards that can be used with almost any merchant,” he says.
Still, to raise their gift cards above the competitive clutter, credit unions must offer something unique that will inspire members to buy gift cards from them—either the card itself or something extra.
“For example,” Falk says, “can they design a gift card that stands out and inspires recipients to pull it out and talk about it with friends? A good-looking card plants a seed that later gets people through the door.”
Among the gift card marketing tips Falk offers credit unions:
• Use strong collateral material that points out the convenience and advantages of gift cards, as well as the credit union’s traditional reliability and trustworthiness when it comes to fees.
• Make a value proposition. Why buy from a credit union rather than a retailer?
“For one thing, credit unions have the ability to set fee parameters, which allows them to be competitive,” Falk says. “Also, some credit unions offer a sale promotion, such as two for one, where a member can buy two cards for only one set-up fee, or buy five cards and receive a sixth one free of fees.”
Falk’s other keys to promotional success:
• Work with small businesses by suggesting gift cards as bonuses or spot awards.
“When business members come in looking for 10 crisp $100 bills to hand out, a teller can upsell them to Visa gift cards, which are safer to carry, can be tracked, and show that the givers went to some trouble,” Falk says.
• Hold contests where tellers vie to sell the most gift cards, with the winners themselves receiving cards.
• Create Christmas Club variations, where the credit union sends club members a charged gift card around the holiday season that can be used right away versus a check that has to be cashed and cleared.
• Offer gift cards as an incentive to open an account or take out a new loan.
A U.S. District judge Monday dismissed three lawsuits--including one by the National Credit Union Administration--brought against U.S. Bank National Association and Bank of America, National Association regarding their duties as trustees of residential mortgage-backed securities.