Catuity Launches Branded Gift Card Strategy

"Rose Zwirn brings to Catuity strong relationships, a history of success and a hands-on approach to managing the execution of a program for our clients," said John Racine, President & CEO of Catuity Inc. "We believe that service is our true competitive advantage."

"Gift cards and loyalty together have an exponential benefit for the bottom-line of a retailer and we are well positioned because of our ability to combine the two," said Mr. Racine. "Since 2001, we have provided closed loop gift card programs in the U.S. through our proprietary technology. This new ability to issue branded gift cards broadens our offerings and puts us on equal footing with competitors pursuing our largest sales targets."

Mrs. Zwirn's career in the stored value business has tracked the emergence of the industry as a high-growth opportunity. Her credentials include successful operational roles at Datamark Inc. and ExtraMeasures. Mostly recently, she created Enhanced Card Solutions, which advised clients on how to grow their bottom-line through the use of stored value programs. Throughout her career, Zwirn has worked with pioneering clients, including AT&T, R.J. Reynolds and Ruth's Chris Steak House.

"Now we can offer retailers a complete line of gift card solutions that match their needs and customer strategies," said Mrs. Zwirn. "Catuity's strength in loyalty gives us the ability to enhance a gift card into a program that turns shoppers into repeat buyers. Our mission is to help retailers find, keep and profit from the right customers. Adding branded gift card gives us a complete solution for our customers."

Catuity has the ability to issue a wide-range of stored value cards for incentive marketing programs; sales promotions; customer acquisition, POS sales programs; and a wide-range of loyalty-enhanced programs. "Our strategic difference in the market is our ability to combine loyalty and stored value to make gift cards more valuable and to increase the buying potential and impact on new sales created by our cards," said Zwirn.

Catuity is introducing the new open gift card capability only in the North American market today. The company expects to introduce the same capability in the Australian market in 2007.

"Investors should know that the new product gives us the ability to serve larger clients who do not want to deploy programs which require integration to the point of sale," said Mr. Racine. "At the same time, it gives us the ability to deliver another product to existing clients, such as the rollout of incentive cards for our retailer clients who already have proprietary loyalty and gift card programs from Catuity."

While the open gift card market may be broadly defined, Catuity competes primarily in the space for incentive and promotional cards. In a June report, the industry research firm Mercator Advisory Group forecasted that 1.7 million incentive cards will be issued in 2007, a 35% increase over this year.

"We are focused today on a niche market that fits well with our boutique position in this business. We intend to grow with this market," said Mr. Racine. "The companies that we are targeting today use traditional marketing programs which are not fully represented in estimates of the potential size of this market. Retailers understand that consumer adoption of a promotion is higher on a card than with paper-based programs. Higher adoption means growth in their sales, which is why we have a compelling message."