Card Briefs: Chain Plans Smart Card Gift Certificate Pilot

Sutton Place Gourmet Inc., an eastern chain of specialty food shops, plans to initiate in May or June a pilot program to sell smart card gift certificates.

The program was developed by National Transaction Network Inc., a provider of credit, debit, and check authorization systems for the grocery industry, and Schlumberger, the French smart card manufacturer. The program will replace paper gift certificates with stored valued cards.

Sutton Place, a 14-store chain in the Middle Atlantic region, is the first grocery to try National Transaction's Pinnacle Gift Card program.

The retailer will purchase $350 Verifone smart card readers for each of 10 checkout lanes in the Washington, D.C., store where the program is being piloted, said Paul Siegenthaler, president and chief executive of National Transaction Network. The modules will be added to existing credit and debit terminals.

The system will be controlled by the grocer. Cards will be sold to customers in-store to be used at the point of sale. There will be no interchange fees or involvement of a bank.

"Retailers will be the impetus of smart cards," said Mr. Siegenthaler. The income from stored value is too small to interest banks, he said.

Sutton Place Gourmet chose to initiate the pilot to gain the convenience of instant authorization on gift certificates, as well as speed of processing at the checkout lanes, and elimination of the need to refund cash if the entire certificate is not spent. The Pinnacle Gift Card is not reusable once the total amount has been spent.