SparkBase will NEVER sell directly to merchants.

…and we’re just getting started. With a completely new portal just around the corner, we can’t wait to see what 2009 looks like.

About SparkBase:
SparkBase is the largest Stored Value gateway for the processing of “Private Label” gift and loyalty card transactions to the merchant services industry. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually for some of the largest payment networks in the industry. This offers a competitive advantage to the MLS and ISO that want to process stored-value cards, without having to build and manage a separate datacenter of their own. Unlike traditional stored-value models, SparkBase does not retain any ownership of the merchant contract. The ISO/MLS is free to process transactions however they would like on the fastest and most secure network in the industry. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

“This is going to push the reward aspect of our merchants’ business” said Doug Hardman, SparkBase’s Founder & CEO. “The texting for a balance is pretty simple, but we wanted to offer something special. When a merchant wants to reach out to 1,000 cardholders instantly with a last-minute promotion…they can do it in a matter of seconds. This type of innovation has catapulted Sparkbase into the limelight as the fastest growing stored-value network in the industry. Forward thinking of this type demonstrates to our ISOs that SparkBase is committed to helping them grow the business in new and creative ways.”

In the coming weeks, SparkBase will roll out this new functionality, along with an administration panel that will give the ISO and merchant the ability to manage rewards messages, points triggers, and general balance requests.

“We chose Inspiton Logistics primarily because they power the “Wireless Emergency Notification System” that notifies people in Academic, Government, and Corporate environments of emergency situations.” said Hardman “If they can be trusted with those types of mission critical applications, we can certainly rely on them to get our messages out.”

Inspiron Logistics’ system was designed to work proficiently in the event of the most extreme-case scenarios. WENS ensures a reliable method of communication at a time when it is needed most, and allowing first responders and emergency personnel to focus on aiding a fully-informed community.

“Inspiron Logistics is excited to support SparkBase’s new SMS service.  We look forward to providing the same reliability and speed that made us the leader in emergency mobile notification applications. It is this level of service that makes Inspiron Mobile the best choice for Enterprise-Level business applications”, said Inspiron Logistics’ Founder and President Scott Dettling.

About SparkBase:
SparkBase is the largest Stored Value gateway for the processing of “Private Label” gift and loyalty card transactions to the merchant services industry. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually for some of the largest payment networks in the industry. This offers a competitive advantage to the MLS and ISO that want to process stored-value cards, without having to build and manage a separate datacenter of their own. Unlike traditional stored-value models, SparkBase does not retain any ownership of the merchant contract. The ISO/MLS is free to process transactions however they would like on the fastest and most secure network in the industry. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

About Inspiron Logistics Corporation:
Inspiron Logistics is a privately held company based in Cuyahoga Falls, Ohio.  Their mission is to help customers leverage the global wireless infrastructure. Inspiron Logistics provides two SMS based messaging solutions. Inspiron Mobile enables business applications to send messages reliably and quickly.  The Wireless Emergency Notification System, WENS, enables sending a large number of emergency alerts in a short period of time. All SMS services are provisioned with North American carriers to ensure the highest reliability, speed and traceability. Inspiron Logistics is at the forefront of the mobile technology evolution to provide the most reliable, intuitive and functionally rich means of communication. For more information about Inspiron Logistics, call 866-998-WENS or visit http://www.inspironlogistics.com.

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The overall move went smoothly, and we’ve already started settling in. Now…where did we put the coffee pot?

About SparkBase:
SparkBase is the largest Stored Value gateway for the processing of “Private Label” gift and loyalty card transactions to the merchant services industry. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually for some of the largest payment networks in the industry. This offers a competitive advantage to the MLS and ISO that want to process stored-value cards, without having to build and manage a separate datacenter of their own. Unlike traditional stored-value models, SparkBase does not retain any ownership of the merchant contract. The ISO/MLS is free to process transactions however they would like on the fastest and most secure network in the industry. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

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“This new gateway is seriously revolutionary. We were able to shave 2-4 seconds off of our normal transaction time, and improve reliability over older phone lines.” Said SparkBase CEO Douglas Hardman. “We’re seeing a lot of people move to IP, but there is a substantial contingent of merchants still on older dial-up terminals. With the ability to migrate merchants off of other networks, while maintaining support for our own library, SparkBase is an even easier decision for ISOs of all sizes. We also continue to be 100% backwards compatible to all of our supported terminals. The only thing that merchants should notice is faster transaction times while the customer is waiting.”

With this transition completed, SparkBase will also begin rolling out a new reporting structure that will be fluidly compatible with several CRM packages like SalesForce.com, NetSuite, and open source applications like SugarCRM. This will enable SparkBase ISOs to manage their customer base through their own existing applications, without using any of the provided SparkBase tools.

The way the industry is shifting, you have to be compatible with a lot of things,” said Hardman. “We have a very robust set of tools, but there are some clients that have invested substantially in their own software. This just makes it easier for them to manage their merchants with minimal modifications to their own software.”

The gateway transition occurred at 4:00am EST on June 28th. The integration and reporting updates are expected in the coming months.

About SparkBase:
SparkBase LLC. is a leading Stored Value datacenter for the processing of of ISO Private Label gift and loyalty card transactions to the merchant services community. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually, all behind the scenes of its customers. This offers a competitive advantage to the MLS and ISO market that may not be able to afford the costs associated with a datacenter of their own. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

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It’s hard to find a big-box retailer that doesn’t take gift cards. In fact, it’s getting hard to find a small retailer that doesn’t take them either. This means that retailers are starting to see the benefit to “Going Plastic” by using gift cards as a way to keep customers. The benefits of having up to 18% breakage is undeniable. This is often the determining factor from the retailers we talk to. There are several small-town merchants on the SparkBase network that have more than $50,000 in card balances that haven’t been used in 2+ years. What are the odds of the customers coming in to use that money after 2 years?

On the flip-side, the number of merchants that are available to sign-up as new customers is starting to wane. 3 years ago, only 5%-10% of the small “Mom & Pop” businesses in the US had a Gift Card program. That number is starting to shrink on a monthly basis as Credit Card ISOs push Gift Cards as a merchant retention tool. This model is simple. Give the program to the merchant for free, and if they ever leave your Credit Card processing, you still have a hook into the merchant. It’s easy to move your Credit Card processing, it’s almost impossible to move your Gift Card processing.

A merchant’s inability to move the Gift Card transactions between multiple companies isn’t a bad thing though. When a merchant signs up for a Gift Card program on the SparkBase network, they have the security of SparkBase behind them, even if they don’t know it. We work behind the scenes of the ISO to make sure that the latest terminals are supported, and the system remains up and running. If they were to go with one of our smaller competitors that only has a few hundred merchants, any number of things can go wrong and they could potentially be left with thousands of gift cards in the field, and no idea what the balances are.

What makes the “Great Gift Card Land Grab” so interesting to watch from this end isn’t seeing all the ISOs try to wrap their merchants into contracts, it’s seeing the diversity of businesses that are able to use Gift Cards. It’s also interesting that very few customers are ever displeased with their program. It’s a win-win for everyone.

About SparkBase:
SparkBase LLC. is a leading Stored Value datacenter for the processing of of ISO Private Label gift and loyalty card transactions to the merchant services community. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually, all behind the scenes of its customers. This offers a competitive advantage to the MLS and ISO market that may not be able to afford the costs associated with a datacenter of their own. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

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At SparkBase, we’ve committed to reducing emissions across our entire network. Not just by recycling, or turning off the lights when we leave. Here are just a few of the things that we have done to try and do our part for the planet.

Encouraging our ISOs to use renewable “Corn Cards” as a replacement for traditional PVC Gift Cards.

Choosing Single-Processor servers in our data-centers for light-processing operations like DNS and scheduling.

Turning off all non-essential hardware after business hours.

Using fluorescent bulbs as a replacement for every incandescent light in our offices.

Using energy-efficient appliances and design practices in our new offices.

Choosing to tele-conference wherever possible.

…and it doesn’t stop there.

“Going Green” isn’t about recycling something you’ve already used…sometimes it’s about offering something that you didn’t use. We’d like to work with environmentally conscious companies in Cleveland. If you have an idea on how to help the environment, and are a Cleveland based company, we want to hear from you. We’ve got excess bandwidth, and can assist in development and exposure for your idea. We have gobs of unused bandwidth that we can offer your website…saving you a different kind of green. For more information, contact us.

Happy Earth Day!

This particular ISO is planning on porting their entire portfolio to the SparkBase platform to process an existing nationwide Gift & Loyalty program. With our advanced transaction porting software, we don’t expect this to take more than a week or so. This will enable the ISO to offer their merchants a substantial upgrade in reporting capabilities, as well as the increased access and power that SparkBase offers the ISO.

We will also have several more announcements in the coming weeks, as more and more companies choose SparkBase for their Stored Value processing.

About SparkBase:
SparkBase LLC. is a leading Stored Value datacenter for the processing of of ISO Private Label gift and loyalty card transactions to the merchant services community. Headquartered in Cleveland, Ohio, SparkBase processes millions of transactions annually, all behind the scenes of its customers. This offers a competitive advantage to the MLS and ISO market that may not be able to afford the costs associated with a datacenter of their own. Serving merchants nationwide, as well as 4 countries, SparkBase is positioned to be the growing standard for ASP modeled transaction reporting. SparkBase has grown by more than 150% annually since processing its first transaction in October of 2004. For more information, visit SparkBase.com

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We’ll be expanding the content over the next few months as we add to our library of terminals, supported networks, and offer industry news as it happens.

We’ve had quite a bit of press about our company lately, partially because of our growth rate, and partially because of our choice to move operations to Cleveland. You can keep tabs on the progress of that over at our Office Blog at http://office.sparkbase.com.

The images throughout the site are just snapshots of what makes our company cool. Source Code that was 100% written in-house. Terminal Support. Solid Modem Banks. And a pic of our founder’s Great-Great-Grandfather working for a telegraph company in the 1800s. (Communication has come a LONG way…)

Bankruptcy makes gift cards worthless

If you don’t feel like reading it, that’s fine…here’s the meat of the article.

The Sharper Image filed for Bankruptcy protection, and as a result, aren’t honoring their gift-card program any longer. My initial reaction was “Of course…if a company goes under, you can’t spend it there either.” Then I started reading between the lines for the deeper meaning of the issue at hand.

Merchants rely on what is referred to as “Breakage” to help offset the cost of a Gift Card program. Normally, a merchant can expect that somewhere between 12%-18% of the money put on a card won’t ever be redeemed. One guy may spend all $20, another $5 before he looses it, and another may throw it out mistakenly in a pile of wrapping paper while trying to straiten up the house before Christmas dinner. (That’s NEVER happened to me!)

Retailers bank on this because they generally pay $.25 for the transactions coming and going. If you buy a $100 card, the retailer gets all $100 up front, and a network like SparkBase keeps track of the money for the merchant. Over time…2-3 redemptions will happen, and the merchant will have paid out $1.00-$2.00 in fees for having someone else process the transaction. Normally, they don’t mind because the law of breakage says they’ll keep about $13.00 of that $100.00. Now, back to the matter at hand…

Because they have to honor the card indefinitely in some states, Gift Card revenue isn’t required to be reported as income until they redeem it. If I buy a $100 card to “Moe’s House of Shoes” down the street, and loose the card, it’s the same as loosing a $100 bill. Moe never has to honor the card, but if I DID bring it in, he’d have to. It’s like an IOU that never expires, and is completely transferable. So at the end of the day, if I loose my card, and never spend that $100…Moe never has to pay income tax on it, because if I show up with it…he’ll honor it. The Home Depot recently had to deal with $43,000,000 in breakage.

The Home Depot tallied gift card breakage from 1998, when it began its gift card program, to 2001, and reported it as income in its June 2 filing. “Since we had not reported breakage before, this was essentially just catching up,” said Home Depot Marketing Manager Diane Linke. “Going forward, there will be additional breakage reports, but not nearly on the magnitude of this quarter.”

So back to our friends at The Sharper Image. I don’t have access to the totals, but they may have HAD to expire the cards in order to comply with bankruptcy laws. I’m no attorney, but I’d hazard a guess that this is the reason.

The question I was asked most often was “Does this effect your business?” Not in the slightest. Consumers are still choosing Gift Cards as the standard for all their gift giving needs. My business is doing nothing but growing.