Square’s Gift Card Gift To Small Merchants

Square recently introduced Gift Cards to its Wallet and Register apps. This lets users purchase and redeem these cards both via the app and through Apple’s Passbook if they’re on iOS. It’s a slick addition, very interesting given that this was exactly how I predicted Square might dip its toes into leveraging Passbook.

But it stands to have a pretty big impact on tons of small vendors that use Square for payments via smartphones and tablets in their shops or at their kiosks.

If you’ve never had to choose and set up a gift card solution for a business or company, you might not know that it’s a pretty big pain in the butt. Sure, you can go with the old hand-written certificates, like the olden days. But they’re hard to track and nearly impossible to update or analyze accurately. The only real option is to choose a provider that you can oder customized plastic cards from and who will process, track and manage the cards for you.

Most of the time, this is done via your credit card machine, though there are sometimes dedicated terminals that are installed. Either way, there is normally a fee per card and sometimes per redemption, the machines must be rented and the service typically has a monthly or yearly fee. It’s a big additional expense in both money and administration hours just to keep the cash spent at your store.

With this addition to Register and Wallet, every Square merchant just got a gift card system without having to invest any additional money or time. The people out there running one, two or few-man operations that are using all of the resources that they have to keep things rolling and growing now have to worry about one less thing. It’s going to have a huge impact for these folks.

My favorite local coffee roaster Café Corazón, for instance, tweeted out that customers could now send those cards out to anyone using Wallet. And if the recieving party is on iOS, that card can go right into Passbook. Leo uses Square to process all of my purchases from an Android device right in the shop, and now he has a full on gift card system, without having to lift a finger.