1. Introduction

The WorldWide Gift & Loyalty Card Program is a smart card based system which enables small and medium-sized businesses to issue and redeem electronic gift and loyalty cards. The system is also scaleable to suit the needs of large multi-location retailers or franchises.

2. Equipment

Because the system is smart card based, specific smart card capable equipment is required. Currently, the system runs on the Schlumberger MagIC 6000 terminal, with optional MagIC 1000 PIN pad if ATM/Debit service is to be offered.
The program can also run on the Schlumberger MagIC 1800 PIN Pad/Smart Card Reader, which can be added as a peripheral to ECRs or PC/POS systems.
These terminals can also process credit card, debit card and check guarantee transactions through most major processing networks.

3. Program Options

The program can be set up to offer gift cards only, loyalty cards only or both.
Gift Card Program – Under the gift card program, cash value is stored on the smart card chip and the value is increased or decreased through use of the terminal.
Loyalty Card Program – The loyalty program can be tailored to an individual merchant’s requirements. Options include:

• Frequency Counter – This option tracks the number of visits a customer makes to the merchant’s store, and is often used by fast food stores (e.g. Subway, etc.). The terminal can be programmed to redeem points for specific menu items (e.g. 5 visits = free medium drink, 10 visits = free small sandwich, etc.). If this option is selected, the terminal will display specific menu items and debit the proper number of points when card is redeemed.

• Points for Purchase – This option allows the merchant to issue a specific number of loyalty points per dollar spent by the customer. For example, the merchant might issue 10 points per dollar spent, and a $50.00 purchase would result in 500 points being added to the customer’s card.

• Rebate on Purchase – Under this option, the merchant can add cash value to the gift card side of the card based on the amount spent by the customer. For example, the merchant might elect to issue $0.10 in gift card value for every dollar spent. A $100.00 purchase would result in $10.00 of value being added to the card, which could then be redeemed on a future visit to the store.

4. Other Functions

The gift and loyalty application also includes an Electronic Age Verification (EAV) function. This enables the terminal to read the magnetic stripe on a driver’s license and display the following information:

• Driver’s License Number – For verification against number printed on license

• Age – Eliminates need for clerk to calculate age.

• Date of Birth

• Expiration Date.

The terminal also provides audible feedback based on the license-holder’s age:
1 Beep If customer is 21 or older
2 Beeps If customer is 18 – 20
5 Beeps If customer is under age 18
The terminal stores the license number and date of birth and can print a daily audit report if desired. The report includes details of each license scanned, as well as statistics on ages of customers.
The report is printed as part of daily batch reporting if this option is selected.

5. Transaction Processing

Because the system is smart card based, it can operate in an offline environment. That is, the terminal does not need to dial up to the host in order to perform transactions. All transactions are handled between the card and the merchant’s terminal.
Offline transaction processing using smart cards results in significantly faster transaction times than with competing magnetic stripe based programs, which require a connection to the host on all transactions. Offline processing also allows the merchant to avoid host bottlenecks and dial-up connection failures which can occur with magnetic stripe based programs during peak holiday times when gift cards are most likely to be issued and redeemed. An additional advantage of offline processing is that it offers lower communications and transaction costs compared to online magnetic stripe card based systems.

6. Settlement and Reporting

The terminal only needs to connect to the host once a day in order to settle and report that day’s batch of gift and loyalty transactions. The terminal will connect to the host only if there are transactions to be reported for that day. Connection to the host is scheduled at a set time each night.
Daily transaction batch reporting is generated by the terminal and a monthly transaction statement is mailed to the merchant.
All gift card and loyalty card transactions are individually reported, and the merchant has the option of associating cardholder data (Name, Zip Code, Birthdate, Phone Number) with each card, which can provide valuable demographic and marketing data.

7. Single Location/Multi-Location

The program is designed to support several different merchant ownership scenarios, including:

• Single location

• Multiple locations/Same owner

• Multiple locations/Different owners (mall, franchise, etc.)

In the mall scenario, the mall management or merchant association would establish a trust account ("funds pool") to be used in clearing transactions.
When a participating merchant sold a gift card, the funds would be ACH transferred from that merchant's checking account to the funds pool. When the card was redeeemed, the appropriate funds would be ACH transferred from the funds pool to the redeeming merchant's account.

8. Merchant Benefits

The WorldWide Gift & Loyalty Program offers numerous merchant benefits, including:

• Increased Sales & Profits

• Attracts new customers

• Generates repeat traffic

• Increases frequency of visits

• Generates higher tickets

• Increases Profit margin

• Keeps more cash in the business

• Save Money & Reduces Losses

• Eliminates counterfeiting of gift certificates

• Stops pilferage

• Reduces administrative costs & hassles

• Convenience to Merchant

• Easy to implement

• Easy to issue & redeem cards

• Easy to track

• More flexible than paper-based programs

• Convenience to Customers

• Cards are easy to carry and redeem

• Great gift for the “hard-to-shop-for”

• Enhanced Advertising

• Personalized card designs

• Differentiation from competitors

• Branding opportunity – “A Billboard in a Billfold”

WorldWide Gift & Loyalty – Merchant Program Overview Page Copyright ©2002 – WorldWide Gift & Loyalty Inc. All Rights Reserved. The SMART choice for gift & loyalty card processing!