Out of all the elements of Ferret Card’s platform, the one feature we get the most questions about is the Stamp Exchange. Some merchants worry that it can be abused by customers, and some merchants worry that it can be misused by unscrupulous merchants. To address these concerns, I thought it best to write this blog entry to talk about the Stamp Exchange in greater detail.
How it Works?
First of all, the important thing to remember about the Stamp Exchange is that Ferret Card users are able to exchange stamps in their wallet only for stamps available in the Stamp Exchange. In no way does the Stamp Exchange increase the potential redemption cost to a merchant.
For example: A merchant has done sales of $5000, and has thus issued 5000 Gold Stamps to Ferret Card members. Those Gold Stamps are held either by that merchant’s customers, or have been traded into the Stamp Exchange in exchange for stamps from other merchants. The total number of Gold Stamps in circulation remains 5000, regardless of what that merchant’s customers do with those stamps.
The only way that Gold Stamps are deducted from Ferret Card’s platform is when they are redeemed by a customer at a store.
As a merchant, if you offer great Rewards to your loyal customers, they will be much less likely to trade away your Gold Stamps. They will want to hold on to them, in order to come BACK to your store to redeem. REWARDING and RETAINING your loyal customers should be one of your highest business priorities, and having a great Reward for Ferret Card users achieves exactly that!
Alternatively, if the Rewards you offer your customers are not appealing, they are less likely to want to keep your Gold Stamps. This is where the Stamp Exchange comes in: your customers can trade away your stamps, in exchange for stamps from another business offering better Rewards. While your customers have still been rewarded for visiting your store, you haven’t given them a great reason to return to your business. This is a failure in RETAINING your customers.
In order to encourage Ferret Card users to keep their Gold Stamps and come back to your store, Ferret Card imposes additional trading restrictions:
- Users can only trade for Gold Stamps from stores they have been to before (no such restriction on Silver Stamps)
Why we do this: To ensure that users are only redeeming Gold Stamp Rewards at businesses they really have been to before. A Ferret Card user redeeming a Gold Stamp reward at your business really is a loyal customer!
- Users must trade away 2 Gold Stamps for every 1 Gold Stamp received in return
Why we do this: This discourages excessive trading of stamps amongst Ferret Card users, so that they are more likely to keep the stamps they have and earn a redemption level at your store. Additionally, it also means that with every trade the total number of stamps in the Stamp Exchange increases. This leads to greater choice for Ferret Card members!
The Power to Choose
Ferret Card members love the Stamp Exchange because it gives them the power to choose which rewards they want. There could be many reasons why a user would want to trade away your stamps:
- Maybe the user doesn’t live near your store. Trading away your stamps is a way for that customer to still get value out of your Ferret Card Gold Stamps, and allow another of your loyal customers to make use of those stamps instead
- Maybe the customer just needs those few extra stamps to redeem for a great Reward at another business. It’s not that they’re not a loyal customer, but they need those stamps right now!
- Maybe your rewards are not appealing. They could still love your business, but they just feel they get better value by trading away your Gold Stamps
- Maybe they really don’t intend to come back to your store
By analysing what your customers do with your stamps in our Ferret Card CRM reports, you can think about what areas you need to improve in your business.
One of the comments we get from merchants is that there is a potential for other merchants to misuse the Stamp Exchange, by issuing lots of stamps to themselves and then trading those stamps in the Stamp Exchange for stamps from other merchants.
We do admit that this is something a short sighted merchant could do, but the Stamp Exchange has been designed in such a way to minimise such potential misuse:
- Gold Stamps can only be traded for Gold Stamps from stores you have visited before. A merchant looking to misuse the system is limited in the number of stamps they can trade for. Additionally, this is great for the other merchants: this means they have a customer coming back to their store, regardless of where that customer got their stamps!
- The Stamp Exchange is limited by the number of stamps that have been traded away by other users. There is no effect on the total liability of other stores. Instead, it is driving a customer back to those stores
- It is increasing the potential liability of the merchant trading away their stamps. All those stamps traded away are now available in the Stamp Exchange, to be traded for and thus redeemed at your business.
- I.e.: If a merchant traded away 100 of their own Gold Stamps for 50 Gold Stamps from a coffee shop to redeem a free coffee, the cost to the merchant is that those 100 Gold Stamps could be redeemed at from their own store. For the coffee shop, those 50 Gold Stamps were already outstanding and could have been redeemed by anyone who traded for the stamps.
Failing all that, Ferret Card also continually monitors merchant’s usage of the platform. If we believe a merchant’s sole intention is to try to take advantage of the Stamp Exchange, Ferret Card can also terminate a merchant from the system.
Any merchant who tries to misuse the Stamp Exchange is losing out on a valuable tool to REWARD and RETAIN their customers, in exchange for maybe getting a free coffee from another merchant. It is our belief that those merchants who are serious about building their business are not that short-sighted. If used properly, Ferret Card is an amazing tool for small businesses to really enhance their offering to their customers!