Delaware Merchant Group Launches Gift Card

A Delaware-based merchant association last week launched a Visa-branded gift card. The Downtown Newark Partnership is using the gift card to replace a paper gift certificate used since 2003.
The association sold its first card Thursday and expects redemptions to pick up after the holiday season, says Maureen Feeney Roser, the Downtown Newark Partnership administrator. The cards are free, but cardholders pay a $2.95 monthly maintenance charge after 13 months of nonuse. Consumers can load the card with $10 to $500 in $5 increments.
Seventy merchants accept the cards, and Roser expects more will soon. “We have about 200 businesses in the area, and many probably thought the gift certificates were an administrative burden,” Roser says.
Maverick Network Solutions, a Wilmington, Del.-based independent sales organization, is the program manager and processes the transactions. Palm Desert (Calif.) National Bank issues the cards.
Merchants that accept the card must register their point-of-sale equipment with Maverick using a “merchant enrollment card,” according to Barbara Hvasta, Maverick vice president of alliance and product strategy.
Swiping the card through POS terminals enables Maverick to identify participating merchants and approve transactions made with the private-label card, Hvasta says.
The association made the switch to gift cards primarily to keep funds flowing through Newark’s downtown area. “There was no guarantee the change [the consumer received] from the gift certificate would go to other downtown merchants,” Roser says.
The gift certificates were designed for one-time use. If a consumer made a $5 purchase with a $25 certificate, the merchant was expected to give $20 in cash back to the customer. “Now the consumer can go right next door and keep using the gift card,” Roser says.