Gift Cards: A Booming Niche in the Marketplace
When it comes to gift purchases these days, more and more people are paying with plastic – and not just the credit card variety. The National Retail Federation reports that consumers bought some $25 billion worth of gift cards over the recent holiday season. Printers have been taking notice of this growing opportunity in the marketplace. At OnTime Mailings in Chelsea, MA, a specialist in card embossing, President Richard Connolly says, “In the year 2000, we did fewer than 10 million cards, but for 2006 we’ll do approximately 100 million.”
By any measure, gift cards are a booming business, one that could attract printers’ attention as a potential diversification path. “I don’t think it’s a huge stretch for many printers,” says Jeff Peters, Vice President and Managing Director at Datacard Ga-Vehren, an NPES member. He notes that a newcomer to the specialty would have to invest in high speed equipment to print and emboss the cards and encode data onto the magnetic strips. “For half a million dollars, you can be in this business,” he says. “These are not scary numbers for people accustomed to buying big presses.”
“Even commercial printers not interested in producing and personalizing the cards can find major sales opportunities in printing the hanging holders on which most gift cards are displayed, along with other point-of-purchase displays and card packaging,” Peters adds.
All of this is not to say that entering into this business is a simple matter. In fact, its complexities and “zero” margin for error may be more daunting entry barriers than capital investment. “There’s a lot more to gift cards than just printing,” says Jake Jacobs, Vice President at Arthur Blank Company in Boston, a leading supplier of card production and encoding systems and one of America’s largest producers of gift cards.