Prepaid debit cards are a specific type of gift card pre-loaded with a fixed monetary amount. In 2012 alone, $77 billion worth of transactions took place using these rectangular pieces of plastic. It is not surprising that businesses of all types are reaching out to reward both consumers and employees with prepaid cards and their popularity continues to soar. Curtis Arnold of Forbes cites 9 creative ways to use prepaid debit cards in a recent article including: door prizes, employee incentives, event attendance, blog giveaways, and tax refund payments. We want to focus on the effectiveness of these cards in the recognition of not only employees, but also customers, dealers and channel sales personnel.
Over half of the companies that give out non-cash rewards utilize some type of gift card. There are three basic categories. The first type is a debit card offered by credit card companies or banks that can be spent virtually anywhere credit cards are accepted. It is usually pre-loaded with a fixed amount, but sometimes able to be recharged. The second is a retail or manufacturer gift card offered by household name retailers, hotels, airlines, and restaurants. These are typically valid for face value and customizable with company logos or specific product imagery. The third type is a debit credit card. These cards appear to be a standard credit card issued in the user’s name. There is a fixed amount deposited toward the card balance initially and can be spent anywhere credit cards are accepted.
There is an ease of use and flexibility that comes with prepaid cards that benefit the recipient as well as the issuer. Aside from the more obvious sense of appreciation that comes with receiving a gift of material worth, a less obvious response is now being recognized as well. Confidence is an underlying form of appreciation when someone is given a card in his or her name that, due to the economy’s impact over the last seven years, may not have the opportunity to use a credit card otherwise. This provides a level of self-assurance that cannot be replicated with cash rewards and in return, loyalty.
On the issuer’s side, a prepaid card comes with straightforward shipping, customizability, the simplicity of recharging a card without incurring the cost of a new card each time, and an inimitable display of gratification for one’s patronage. Prepaid cards can be used in a multitude of programs at all levels producing a sense of fulfillment and motivation across the spectrum from sales incentives to non-profit event attendance motivators.
The pros of gift cards include:
- A Plethora of Options – Nearly every retailer and many consumer product manufacturers and travel-related companies offer gift cards.
- Wallet Power – Unlike cash, these cards will often stay in the wallet of the recipient for an extended period of time, serving as a constant reminder of the generosity from the issuer on the branded card.
- Ease of Distribution – Shipping a card in the mail is extremely quick, easy and inexpensive.
- Ease of Use – A majority of cards can be used online or at retail outlets.
- Popularity – Prepaid cards are the most common gift for recipients. An impressive 44% of IRF survey respondents said that prepaid cards were their favorite type of award. When given the choice between a prepaid card or cash equivalent, five times as many respondents chose the prepaid card. Further, over 71% of respondents said that gift cards are either the “best of all gifts/rewards” or “a good gift/reward” while only 8.47% said they would rather have cash.
When you break it down, the pros of prepaid cards make it a worthy investment for any company or organization.
The prepaid debit card industry is booming for good reason and you need an expert in the field to walk you through the process of effectively using cards and effectively growing your ROI. If you are interested in learning more about a JNR Incorporated prepaid debit card program, please send us an email at email@example.com. We will fill you in on how we have been leveraging our relationship with MasterCard® rewarding the employees, customers, and channel personnel of our Fortune 500 clients to consistently exceed their expectations.
To read more on prepaid debit cards, check out our research here.
Written by Kristopher Hewkin