Gift vouchers for franchises: How to handle them properly

A gift voucher from your franchise location or organization is a perfect tool to strengthen your brand, attract new customers, and encourage repeat visits for existing customers. A consumer in possession of a gift voucher from your brand will be more likely to choose your establishment – or one of the other franchise locations – over a competitor.

The benefits of gift vouchers include:

• New customers: Gift vouchers attract new customers who may not have experience with your brand yet.
• Additional spending: Customers often spend more than the value of the gift voucher, leading to extra revenue.
• Loyalty: Gift vouchers encourage repeat purchases and strengthen the relationship between your customer and your brand.

Implementing gift vouchers, processing them correctly in administration, and setting them up in an automated way within a franchise can be complex. In this blog, we delve deeper into the challenges of gift vouchers for franchises and demonstrate how the right gift voucher solution can support both franchisors and franchisees

The complexity of gift vouchers within franchises

Franchise organizations consist of multiple independent locations operating under one brand. This structure presents unique challenges when it comes to the issuance, spending, and internal reconciliation of gift vouchers. Some common challenges include:

Internal reconciliation
When a consumer purchases a gift voucher at one of the locations or online through the franchise’s general website, the voucher should be redeemable at all locations – and possibly also in the online store – either in full or in part.

Example:
A customer purchases a gift voucher worth €100.00 at location A. The customer decides to spend €30.00 of this voucher at location B, €40.00 at location C, and the remaining €30.00 in the online store. How is the reconciliation handled?”

• Purchase: Location A receives the payment of €100.00
• Spending: Every transaction with the gift voucher is automatically recorded by the system with the amount spent at the respective location or online store.
• Reconciliation: At the end of the selected period, all sales and expenditures per location and – if applicable – from the online store are totaled and reconciled with each other. In the above example, location A contributes €100.00 to the joint balance, location B receives €30.00, location C receives €40.00, and the online store receives €30.00 from the joint balance.

Voorbeeld verrekenoverzicht

It is important that all amounts are accurately recorded and that the money goes to the correct entrepreneur or head office. For this, real-time and transparent reconciliation is necessary, where all gift voucher transactions are visible for the head office and only the gift voucher transactions of the respective location for each franchisee. This allows everyone to see how much has been sold and redeemed in a certain period. Manually tracking transactions and reconciliations can be time-consuming and error-prone. This can lead to frustration among franchisees and potential conflicts over payments, which can be prevented with a well-functioning and automated gift voucher system 

Payouts and remittance
Franchisees must be periodically paid out or invoiced by the head office based on the gift vouchers they have sold and/or redeemed in a certain period. This process can be complex and time-consuming without an automated system. With a good gift voucher solution, this process is streamlined. By exporting a SEPA file and importing it into the bank, all locations can be paid out with the push of a button. This ensures an efficient and error-free payout system, saving both franchisors and franchisees time and effort.

System Integration
The franchisor needs to ensure that all locations use the same gift voucher system and that this system integrates with the used cash register systems, tools, and other business processes.

Expiration
Gift vouchers that are not redeemed within the validity period become void and benefit the franchise organization’s bottom line. This period can vary from 2 to 5 years, depending on internal policy choices. The expiration of gift vouchers presents various opportunities. The franchise organization can use them to cover the costs of software and production of the gift vouchers, support promotional activities, or distribute the expired value among the franchisees. Gifty assists in managing this expiration and implementing a transparent and fair system that meets the needs of both franchisors and franchisees.

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Promotional Gift Vouchers
Promotional vouchers are often issued by a specific location for local marketing campaigns, compensating a customer/guest, or rewarding employees. Since there is no revenue associated with these gift vouchers, they can only be redeemed at the location that issued them. This means they are not included in the internal reconciliation. A gift voucher solution distinguishes these promotional gift vouchers from regular gift vouchers, ensuring that the administration remains simple and each location knows exactly which vouchers can be used under which conditions. This prevents confusion and ensures smooth handling of these special vouchers.

Costs
The costs associated with gift vouchers, such as software, production, and integrations with other software tools or POS, can be borne by the franchisor, franchisees, or a combination of both. This is often determined in conjunction with agreements regarding the expiration of unredeemed gift vouchers and whether or not the head office retains commission from the franchisees. Gifty provides advice and tailored proposals to distribute these costs fairly and efficiently. This includes detailed presentations and recommendations, ensuring that decision-making is transparent and well-founded.

Support and Onboarding for Both Franchisees and Franchisors

User-Friendly Manuals and Videos
In addition to personal training sessions, we provide detailed manuals and videos that explain step-by-step how the system works. These resources are always available for refreshers or for new employees.

Support and Assistance
We offer remote support during the implementation phase and afterwards to answer any questions promptly and resolve issues quickly. The head office plays a crucial role in the implementation of gift vouchers. Therefore, we involve the head office throughout the entire process and ensure they don’t have to worry about daily operational details. Even after the initial implementation, we remain available for ongoing guidance and support. Whether it’s technical questions, strategic advice, or system updates, our team is always ready to help. We maintain regular contact with the head office to ensure everything runs smoothly and to gather feedback. This allows us to proactively make improvements and address any issues before they escalate.

Conclusion

Gift vouchers are essential for strengthening your brand and attracting new customers within a franchise organization. The challenges related to reconciliation and system integration can be overwhelming, but with Gifty’s gift voucher solution, these concerns are eliminated. Let us help you optimize your gift voucher program and grow your brand. Whether you are a franchisor or a franchisee, Gifty has the tools and expertise to streamline your gift voucher process and take your business to the next level.

Looking for a solution for your franchise gift vouchers? Contact Gifty and discover how we can support you.