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It's in the Cards

This day-spa owner uses gift card sales to give her cash flow a total makeover.

This story appears in the April 2005 issue of Entrepreneur. Subscribe »

At InspaCorp., a fast-growing Seattle day-spa chain, CEO Colleen Stonesmooths out the wrinkles in her cash flow by borrowing from hercustomers. When retail gift cards first hit the scene a few yearsago, Stone, 49, realized their appeal for her spa clients.Previously, paper gift certificates made up approximately 25percent of sales and were awkward to issue and track. Now, prepaidgift cards account for more than 25 percent of InSpa's incomingcash flow.

And since gift cards often go unredeemed for up to 12 months,InSpa can use that cash in the interim--like an interest-free loanfrom next year's customers.

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