Dispensing Gift Cards Via ATMs

Demand for prepaid stored-value payment cards such as gift cards or phone cards continues to escalate, and now retailers have a new avenue for distributing these payment cards through an existing infrastructure: automated teller machines (ATMs).

Mesa, Ariz.-based Better ATM Services has patented technology that enables existing ATMs to dispense prepaid cards using the standard cash tray and cassettes inside an ATM.

Todd L. Nuttall, CEO of Better ATM Services (BATM), told Chain Store Age that the beauty of providing gift cards through an ATM is the added benefit of including incentives and premiums on the plastic sheet with the pre-paid card.

Each ATM-delivered plastic sheet has space for three cards. A typical offer might include the gift card plus a “coupon” card offering a discount on the next purchase. The third card could be another incentive from the same merchant, or an offer from a synergistic merchant. For instance, a mall-based ATM might dispense gift cards for use at any tenant in the shopping center, and the two “incentive” card spaces could be for discounts at the food court or specific stores.

“The idea is to use the incentive cards to drive people back to your business,” explained Nuttall. “Each ATM has multiple cassettes, usually three or four, so it is very easy to replace one of the cassettes holding cash with the pre-paid cards.”

The ATM can continue to dispense cash, but has the added service of dispensing pre-paid cards, which BATM anticipates consumers will readily embrace. The process is very similar to purchasing gift cards via a kiosk.

Adding the functionality to existing ATMs is also an easy process that typically can be completed within a few weeks. The time-consuming aspect, Nuttall noted, is the planning, design and implementation of the incentives offer.