Here's a link to a Yahoo forum I belong to which is comprised of Art show photographers. There has been much ado over note cards/greeting cards on this site over the years. Tons of yeas & nays. If you search the archives with key words, you'll find more posts on the subject than anywhere else.
http://groups.yahoo.com/group/artshow_photo/ FWIW - I've sold at art fairs for about 20 years. For a time in there, I also printed my own note cards, bought A7 envelopes and clear bags for packaging. My total cost per card averaged $1 US, and I sold them for $5 ea, 3 for $12. You'll never make a lot of money from them, but they can often help pay for show/traveling expenses, etc.
I disagree that they will stifle the sales of larger prints or framed work though. Where they DO interfere is if you also offer smaller matted prints, such as a 5x7 print matted to 8x10 or so. People will often choose the note cards over this size, but those customers who want larger works will NOT be influenced, in my experience. In fact, when I sold a large piece, I would offer 2-3 cards to the customer as a special "thank you" gift.
The upside to selling note cards is that they often produce income from patrons who would not otherwise buy anything.
The downside is that they are quite labor & time intensive for the amount of profit they yield.
In my hayday I would sell an average of 150 cards per show, but in the past few years that number has dwindeled to the point that I no longer produce them.
At art fairs, the largest profit margin is on larger framed work, but the highest quantity sales are on loose or matted prints.
Michael H. Cothran
Nashville, Tennessee