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Downtown District gift card program off to a slow start

BY GABRIELLA DUNN | SEPTEMBER 03, 2013 5:00 AM

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As a means of promoting consumer spending dollars in Iowa City’s core has a number of local officials touting and refuting a newly initiated Iowa City Downtown District gift-card program.

And while only four gift cards, available since Aug. 23, have been sold as of Monday evening, two district executives maintain confidence in the program’s future and the successes it could bring.

Throughout the past few years, the district has made numerous efforts to enhance the image and atmosphere of downtown.

This new gift card program has emerged as a part of these changes.

“We are a new organization,” said Nancy Bird, the executive director of the Downtown District. “We have some money to invest in a vibrant and healthy center. There is an opportunity where there never was before where you don’t have to select one business over the other.”

To date, 85 of the nearly 280 businesses downtown and in the North Side Marketplace accept the cards.

Overland Park, Kan.-based StoreFinancial was hired to set up the closed-loop system in the area for just under $7,000.

Bird sad this fee covered the costs for the company’s staff to go door-to-door in getting each business set up to accept the card.

Now that the program has been launched, the district will pay the company on a monthly basis.

Each card will carry an activation fee of $1.50 in $5 to $100 amounts.

Betsy Potter, Downtown District operations director, said similar programs in other confined districts that had been largely successful in the past, coupled with vocal demand, pushed the initiative forward.

“The initial reason for the program was that we heard from a lot of our businesses that a downtown gift card would be beneficial for them,” she said. “We got almost weekly calls asking if there was a community gift card.”

That just four have sold after several thousand new University of Iowa students, their families, and new residents have arrived in the area in recent weeks, hasn’t alarmed district officials.

Potter said beginning this month, increased marketing efforts towards area parents and students will be pushed, and MidWestOne Bank will began selling the cards today.

Targeting parents of UI students who live outside the area before the upcoming holiday season, Bird said, should help drive up sales of the cards.

“When we go online, there will be added value for the cards,” she said. “Parents can purchase it for kids and so on.”

Leah Cohen, the owner of Bo-James, 118 E. Washington St., stands as a program advocate, and from a business standpoint, she said, she thought the process went smoothly.

“It’s really similar to a credit card,” she said. “I think any community, especially a college community, should have a central gift card.”

Because of the local college setting, Cohen also said the demand for gift cards are present.

“We have people all the time looking for gift cards,” she said. “I think it will be successful, especially with students.”

A similar program in Des Moines generated roughly $90,000 in sales since launching in December 2007 but was recently discontinued because of changes in program costs. Bird said that program was slightly older than the one the Iowa City district has set up and that she is optimistic.

UI economics lecturer Patrick Barron said he is skeptical about Iowa City’s program being successful.

“Frankly, looking at it from a customer perspective, I don’t see why I would buy a card if I don’t get a discount or incentive,” he said.

 Regardless of concerns, much excitement still exists for the new program. UI anthropology student Alex Corbin said he favors it.

“I mean it’s always good to support local businesses,” he said. “It’s definitely something that I would get.”


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