Studies show that people tend to spend more on gift cards than on gift certificates. The average gift card in 2004 was $50, which was twice the amount people would spend on the average gift certificate. Although gift cards seems to be more popular than gift certificate, plastic still hasn’t completely killed paper yet. Gift certificate can still be purchased in various amounts, and are good at various shopping, dining, and entertainment establishments.
So whats the difference between gift cards and the gift certificates?
Well besides the paper vs. cards issue, for gift certificates, you may receive cash back if your purchase was less than your certificate amount. For example, you buy a $20 DVD with your $30 gift certificate and you can take your $10 and buy yourself lunch. If you buy a $20 dvd with your $30 gift card, then you will have $10 waiting for you the next time you stop by the store.
Now a question to those small business owners, do you offer gift certificates to your customers?
Many don’t because the potential of fraud scares them. However, with the right precautions, anyone can take advantage of this great sales tool. Here are some general tips on protection against gift certificate fraud:
- Record all the certificate numbers, date of sale, and the exact dollar amount. Make sure to note when each certificate has been redeemed.
- Do not buy generic gift certificates from office supply stores. These can easily be duplicated and not worth the trouble. Invest in custom designed certificates.
- Use security features like an embossed logo or watermark to prevent photocopying.
- Try to avoid huge cash refunds. It’s best to state on the certificate that if more than $10 worth of change is due, it will be reissued as another certificate.
The thing is, although this seems like a hassle to go through when you can simply go with cards, not all companies can afford cards. The cost of a typical gift card can easily range from $.50 – $3.00, and this is a fee you want to avoid if possible. So if you’re a small or medium sized company, chances are you can’t afford to give your customers the card option, but that doesn’t mean you should stay away from gift certificates. Gift certificates are a great way for you to expand your client base.
From Wiki, “Whether in the form of the consumer attempting to defraud the telephone company, the telephone company attempting to defraud the consumer, or a third party attempting to defraud either of them, fraud has been a part of the telephone system almost from the beginning.” Wikipedia has a nice section on phone fraud that you should check out. They break it down into fraud against users and fraud against phone companies. Very informative and very important stuff.
The thing is, many entrepreneurs think that they are too small to worry about fighting phone fraud but the truth is that they are the ones who gets caught in the fire. It’s better to be careful and watch out for these things because when it happens to you, its gonna seriously cost you.
Make sure that you’re aware of how it works:
- Using default passwords programmed by the manufacturer is not a good idea. “Phone Hackers” can easily break into unused voice mail boxes and rack up thousands of dollars in toll charges. You want to make sure that all phone extensions are password protected, whether it’s in use or not.
- Be careful when using long distance prepaid calling cards. There are thieves known as “shoulder surfers” who observe callers as they punch in their card account numbers in public and can steal your valuable minutes.
- The best way to protect your business from phone fraud is to analyze your bills as soon as they arrive. You want to check for unusual calling patterns and be on alert to calls to the 809 area code in the Caribbeans.
It’s always better to be on the safer side then to get scammed and have to deal with a big loss.
Wikipedia defines fraud as a deception made for personal gain. We all know that fraud is a crime and a civil law, but that of course will not stop people from engaging in fraudulent activities. In this society, fraud protection is a necessity.
One day, if someone you don’t know wants to pay you by check but wants you to wire some of the money back, be careful, it might be a scam that could cost you thousand of dollars. You want to protect your self by following these tips:
1.) Make sure you store your checks in a secure place.
2.) You want to track check numbers so you will notice missing checks.
3.) It’s a good idea to add security features to your checks. For instance, your checks should indicate that they are protected and you should inform your bank of the security measures that you have taken so far. This way, if the bank pays a check that doesn’t include your security features, you are not held responsible for the loss.
4.) It’s not the most fun thing to do but you must reconcile your bank statements as soon as possible.
5.) Make sure to evaluate your check issuing process and conduct a full audit to detect any risk areas.
Statistics show that there are more than one million bad checks that enter the banking system each day. Hopefully you won’t have to worry about yours being a part of the that count.