Book Sense Answers Questions About Monthly Gift Card Fee

As early holiday shoppers begin hitting the stores, Book Sense reminds booksellers that there is still time to order gift cards for early December in-store arrival. (It takes three weeks for card delivery once all paperwork and a logo, which meets the spec requirements, are received.)

To make it easier for booksellers to become a part of the growing gift card market, which according to a recent ValueLink survey includes 64 percent of U.S. adults who said they bought or received a gift card in the previous 12 months -- Book Sense recently added two new methods of processing gift cards: the Elite 710 Terminal, which costs $295 and is a dial-up, and through an enhanced and optional feature of IBID, Version 14. (For a flowchart outlining the methods of communication available to process gift cards, click here.)

And here, in an effort to provide more information for booksellers who have hesitated to join the gift card program, Book Sense offers answers to some frequently asked questions about the $20 monthly fee.

Q. Why is there a $20 monthly fee to participate in the Book Sense Gift Card Program?

A. The gift card program is designed to provide a cost-effective and flexible way for all stores to provide gift cards to consumers. This program gives independent bookstores a competitive marketing tool that allows them to keep sales that would have otherwise gone to chain bookstores. Even if the redemption ultimately goes to another independent bookstore, the ability to keep the money in the independent sector makes us all more viable and profitable. Book Sense has negotiated card costs, transaction fees, and a variety of other program costs on behalf of the entire membership. Bear in mind, that it costs Book Sense and Givex (the company that manages the program with us) the same amount of money to provide customer service and account management to each participating bookstore, regardless of size or number of locations. All stores pay the $20 per month per location on a month-to-month basis.

The $20 covers the following program benefits:

• 24-hour customer service
  
• an 800-number telephone (IVR) back-up system
  
• a variety of reports for tracking gift card sales, redemptions, and outstanding balances all in real time
  
• an easy-to-use Web site for reordering cards and presenters
  
• maintenance of each bookstore account
  
• ACH transfers of all costs, fees, and reimbursements
  
• a liability fund to protect the redeeming store
  

Q. Why do all stores, regardless of size, pay the same amount to build the liability fund?

A. The liability fund model is based on our ability to insure the risk for a group of independent businesses. No outside insurance company, bank, or gift card vendor would assume the risk involved in a program of this magnitude. The risk to a small store is greater than it is for a large store. For example, if a large bookstore that sold $250,000 in gift cards were to declare bankruptcy, drop out of the program, or simply close its doors, it is likely that those gift cards would be redeemed in surrounding smaller stores. It is also likely that Book Sense would not be able to collect those funds from the selling store in order to reimburse the redeeming store, so we collect money from all stores each month in order to protect the redeeming store. The agreement that each store signs does not guarantee that Book Sense will be able to collect money from the store, especially if the store declares bankruptcy. No agreement can do that.

Our experience in developing and implementing the paper program has taught us that in order to provide a national gift certificate or gift card program, the selling store must keep the money from the sale. No bookseller would participate if the money were put into a pool and was given back only as redemptions took place. Taking five percent on the redeeming side, as we did with paper gift certificates, left many booksellers feeling as if they were being penalized for accepting a certificate not sold in their bookstores. So we were once again faced with the challenge of how to provide a competitive product to all of our members while keeping costs down. After looking at other models, including sliding scales, the $20 per month per location fee provided the fairest way to manage a program for all booksellers while protecting everyone's interests.

Q. Will the monthly $20 fee go down in the future?

A. We can't answer that question at this time because we cannot anticipate store closures and other demands upon the liability pool. If demand is manageable and participation grows it is entirely possible that the fee will be reduced. However, we can say that if more stores would participate, we might be able to lower other costs associated with the program. We would also be able to get more support from publishers and be able to enlist other companies to sponsor gift cards and other promotions.

For complete details about the Book Sense Gift Card Program, visit www.bookweb.org/read/6303 or contact ABA Marketing Director Jill Perlstein at (800) 637-0037, ext. 1283 or [email protected]. For a list of participating stores, in PDF format, click here.

Important Note: Orders for The Modern Reader gift cards and presenters made prior to November 8 will be fulfilled; however, The Modern Reader design has recently gone out of stock. Booksellers have three other designs from which to choose. For the available designs, click here.