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How Stored Value Works

Gift Card Sales
Merchants use in-store displays to merchandise Gift Cards much like they would any small
impulse-buy product—by the register with counter signs and colorful card hangers. A customer
purchases a Gift Card with cash, check or credit card for any dollar amount desired. The amount
purchased is recorded as “stored value” or “prepaid” in the host database.

Redemptions
The Cardholder presents the gift card for full or partial payment of a purchase. The merchant
swipes the card through their POS terminal for authorization and transmission of transaction data
on the host platform. The card’s magnetic stripe identifies the card number and merchant location
for which the card has been issued.

Loyalty Cards
Several points-based loyalty card programs can be implemented using stored value technology.
One of the simplest and most powerful applications is what we call Auto Rewards. Under this
program, the system automatically adds a specified Reward Value to your customer's card when
that customer has accumulated a designated number of points..... For example: when 50 points
are accumulated, $10 of spendable value is loaded on the card and the 50 points are removed.
This cycle simply repeats, continually motivating the customer to return to earn more points and
more reward dollars. It's also easy for the customer to understand and for sales associates to
administer.

Reload Incentives
The cardholder can purchase additional value or “reload” the card for any amount—by phone. The
merchant can offer an incentive to customers to encourage card reloading. For example: increase
the customer’s stored-value amount by 20% (i.e., a $50 reload is recorded as $60 in stored value
for the cardholder).

Data Processing
The stored value card system operates in real time as a closed loop debit network. Transactions,
such as card activation, sales, voids and balance inquiries from the point of sale, are transmitted
to the Data Center. The transaction request is fulfilled or authorized, data is captured in the
merchant / client database and an approval or requested information is transmitted via the POS
terminal. The POS printer produces a paper receipt of each transaction — including the card
balance — for the merchant and the customer.

Reporting
A monthly summary report of all transaction activity is provided via mail, email or fax. In addition, a
variety of program management reports are available 24/7 via the Valutec website. You can
generate Transaction Detail reports that list every transaction for specified periods of time, or a
Pooling report that reconciles the imbalances created when cards are purchased at one
merchant location and redeemed at another in a multi-store, multi-owner environment such as a
franchise company.

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