October 1, 2007
By Cathy Fleming
Gift cards might not be big money-makers for credit unions. But members like the convenience the cards provide, and credit union executives find value in adding the cards to their product lineup.
Sarah Canepa Bang, CEO of Financial Service Centers Cooperative Inc., San Dimas, Calif., offers insights into her company's gift card operations.
I love the notion of being able to send a gift card to someone without having to research which stores are close by. From that standpoint, I don't limit my nieces and nephews by telling them where to shop.
Some people buy them to shop over the Internet. These folks are worried about using their credit cards online. They can use a gift card as a debit card. The ability to use it at multiple locations is really appealing.
We sell them for about $1.35. The average cost of a gift card runs around the $3.50 range. The credit union can still up-charge it and make some money or donate money as well.
Who are the primary purchasers and users of your gift cards?
Most of the time people buy them as gifts for family and friends. I buy them for my teenage nieces and nephews. I have a niece who is 13 years old. Giving her one of these cards is such a thrill. They have to sign the back of it and that makes it even more legitimate.
We also give these to our staff. It has solved the problem of what to do on employee anniversary dates and for contest prizes. We give staff a gift card instead of a basket of fruit that they don't want.
Provident Credit Union in Redwood City, Calif., sold hundreds of these during the holidays.
Employees give HEROS cards to their co-workers to instantly reward and acknowledge a good deed or honorable achievement. Employees use their own discretion in determining appropriate reasons for distributing the cards, but consider such things as:
All HEROS cards include a detailed description of why the recipient received this recognition, to be reviewed by the human resources department. The human resources department has the right to refuse any HEROS cards that don't meet the established criteria.
Prizes range from a $5 Blockbuster gift card (for one HEROS card) to eight hours off with pay (28 cards).