Why do merchants participate in the scrip program?
A combination of goodwill, competition, profit margin, no credit card transaction fees, time value of money and risk of loss motivates these merchants. These merchants exchange that 2-24% they are sacrificing in profits for the goodwill and patronage given them by the member families. However, each merchant does a financial equation. That is, most likely their profit margin can absorb the amount they are donating to the member families. Further, they are getting their cash up front and thus getting “time value” on their money while they most likely will not have to honor the gift certificates until months after they are purchased. Further, there is no 3-5% credit card fee on gift certificate purchases so the merchant saves that cost. Also, they are getting a “goodwill” leg up on the competition that is not participating in the scrip program. Finally, the risk of loss has been transferred to the consumer or bearer of the gift certificate. If the certificate is lost the merchant still ke
