One of the most effective ways to help develop and promote the brand that defines a business to customers is to make use of loyalty and gift cards. These are standard sized plastic cards that resemble credit cards and that can be used with similar card swiping point of sale terminals. The cards can also be customized with graphics that represent the business, its products, or that reflect a special occasion so they can be more appropriately given as a gift. Gift cards are made so they contain a certain value when presented at the store, meaning they can be effectively used as a payment method for merchandise purchased through the business. Loyalty cards have no intrinsic monetary value, but instead allow customers to take advantage of in-store discounts, or to accrue non-monetary benefits that can be later exchanged for merchandise or savings.

For the most part, loyalty and gift card processing is done through the same merchant processing services that also provide traditional credit card processing. In the instance of loyalty cards, there are several different processing frameworks that can be established depending on the exact function of the card. Sometimes, a processor keeps an independent database to track the accumulated benefits that a customer has acquired, while other times the card number is deferred to a local database run by the merchant that can modify prices within a register or other system. Since gift cards are handled much like credit or debit cards, they are generally processed directly by merchant services. In most cases, the full value of a gift card is transferred to the merchant when the card is purchased and not when the money on the card is spent. One possible exception is when the gift cards are branded to a major credit card company, in which case transactions are handled exactly like a debit card purchase.

There are some new technologies that can be incorporated into loyalty and gift card processing that can make the experience easier for the customer and the merchant. One option that can be used is a smart gift card. These cards have a small radio transmitter embedded in the plastic that sends out a signal which can be read from a short distance away. This makes it possible for a customer to simply wave the card over a terminal for processing instead of passing it to an employee for swiping. This type of smart technology even allows the cards to take on non-traditional shapes to help further express the brand of a business.

Not all merchant services offer loyalty and gift card processing. Depending on the area and the setup, it can sometimes be beneficial to select two separate processors for regular transactions and for gift card transactions. Other times, a single processor might be a better fit if a business has both brick and mortar stores as well as an online e-commerce site that accepts the gift cards. Whatever method is chosen, using gift and loyalty cards can help to build the image of business and can encourage customers to return to a store for the benefits that the cards provide.