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Stored Value Cards – More than a one time gift
By Kate Jaspon, Dunkin' Brands, Inc

Dunkin' Brands Group, Inc., is the parent company of two of America’s most recognized brands, Dunkin’ Donuts  and Baskin-Robbins. Dunkin’ Brands’ nearly 100 percent franchised business model includes more than 7,700 Dunkin' Donuts restaurants and nearly 2,500 Baskin-Robbins restaurants in the U.S. alone.   Dunkin’ Donuts has a more seasoned gift card program and recently launched two exciting initiatives that utilize the Dunkin’ Donuts Stored Value Card (DD Card) in a powerful way. These two initiatives, including the launch of a mobile application and a rewards program, are designed to reinforce Dunkin’ Donuts’ coffee and breakfast leadership and support the brand’s steady, strategic growth.  As a franchisor, we are always looking for ways to improve our restaurants profitability.  For Dunkin’ Donuts, a stored value card serves not only as a low cost payment mechanism, but it also serves as a powerful marketing tool that increases one-to-one marketing while enabling operational efficiencies. These are the primary reasons why we have chosen to put our stored value card at the forefront to help reduce the total cost of payment acceptance. 

As small ticket merchants, our franchisees have been impacted by the increased cost of payment acceptance since the Federal Reserve authorized an increase in our costs under Reg II. With the new fee structure imposed by the card brands, small ticket merchants are now disproportionately penalized with debit interchange. In addition to our restaurants’ small average ticket, our guests are heavy debit card users and this combination has resulted in our franchisees experiencing a near tripling of fees associated with cost of acceptance. Since stored value cards yield a significantly lower cost of acceptance than a debit or credit card, we have focused on initiatives to encourage the usage of the DD Card in our restaurants.
 
To meet the needs of our on-the-go guests who rely on their mobile devices and to   increase the use of the DD Card, we introduced the Dunkin’ Mobile® App (DD App). We have had the opportunity to share the success story of the DD App through various panel discussions at recent MAG conferences. In August of 2012, Dunkin’ Donuts launched the DD App, with an exciting array of unique features, tools and information.  First and foremost, guests can now use their smartphones to pay right from the DD App using a virtual DD Card. In addition, guests can send an mGift through email, text message or Facebook, as well as manage and reload their virtual DD Card directly on their mobile device.  There are many other exciting features, but mobile payment remains the most popular and this  has created an entirely new level of speed and convenience for our guests.  

In January 2014, we continued to positively evolve our guests’ experience by introducing a new loyalty program called DD Perks®. The DD Perks rewards program uses the DD Card as both the earning and payment vehicle.  With DD Perks, guests earn five points for every dollar they spend on qualifying purchases at Dunkin’ when they pay using an enrolled DD Card, either plastic or via the DD App. Once a member accrues 200 points, he or she receives a coupon for a free medium beverage of choice. Additionally, DD Perks members receive exclusive, targeted, and personalized bonus point offers for specific food and beverage purchases throughout the year. The program is also fully integrated into the DD App, which has enabled increased enrollment. We are very excited by the start of DD Perks with more than 700,000 members, and we have set a target of 2.5 million members by the end of the year.  We expect this early success and visibility to also elevate our mobile presence, increase our guests' use of mobile payment and thereby continue to drive more profitable transactions for our franchisees. 

The DD App and DD Perks program are two examples of our brand’s commitment to exceed our guests’ expectations and help our franchisees run their restaurants as effectively and efficiently as possible.   Both of these programs, which utilize stored value cards as their foundation, will help our company grow and evolve in the future. We know that many of our guests may be your guests, and we hope that the success of our initiatives will influence guests to think of a stored value card as an everyday way to pay. We encourage other merchants to leverage stored value cards given their numerous benefits including one to one marketing capabilities and low cost of acceptance.  We look forward to collaborating at future MAG conferences on additional ways to drive down the cost of acceptance in the industry while continuing to promote our brands.