Company turns ATMs into gift card dispensers

A Scottsdale-based company is betting consumers can’t wait to start buying their pre-paid gift cards via ATM machine.

Better ATM Services has patented technology that enables ATMs to dispense pre-paid gift cards like cash.

According to research by the Tower Group, about $80 billion was spent on gift cards in 2006 in the United States. That included about $600 million in-store cards sold.

“We provide a more convenient, more secure option for merchants to sell gift cards,” said Thomas Honey, Better ATM Services’ chief development and marketing officer. “People can run down to their neighborhood ATM and purchase one, and not wait in line.”

Five locations in the Valley feature ATMs that dispense gift cards:

* Mi Amigos Mexican Grill restaurants in Mesa and Phoenix.

* Macayo’s in Scottsdale.

* Tavern on Mill in Tempe.

The concept is being piloted in the Valley, and eventually will roll out to other markets, Honey said.

Instead of dealing with restaurant staff, patrons can purchase their gift cards at the ATMs inside the restaurants, he said. In addition to the gift card, patrons receive a coupon they can use for free food.

“Eighty percent of consumers (polled) said they would opt to buy a gift card if they get a coupon they wouldn’t have to give to the recipient of the gift card,” Honey said.

Honey hopes other restaurants and retailers want to add gift-card service to their in-store ATMs. He also can envision ATMs eventually offering multiple gift cards for a wide variety of restaurants and retailers.

“We hope it’s going to be taken by storm,” he said. “This adds greater functionality to ATMs.”

David Candland, president of Comida Management LLC doing business as Mi Amigos Mexican Grill, said this is an opportunity for his restaurants to sell more gift cards, which is a more profitable way to sell meals.

“It reduces the credit card fees we have to pay,” he said. “Also, having an ATM in our restaurant ... will increase cash payments, which is always preferable for us.”

It can be a hassle for customers to rely on staff to purchase gift cards, while the machines make it faster and easier for them, Candland said.

“We sell 50 percent of our gift cards during November and December,” he said. “We wanted to make sure everything is up and running, and then we can go gang busters into the holiday season.”