What is prepaid card breakage, and as a manager of corporate or consumer incentive programs, why you should care.

Incentive / Promotional Prepaid Cards

Promotional one-time use prepaid cards can be an effective way for companies to reward, recognize, or incentivize a broad spectrum of audiences. Incentive programs range from employee recognition to consumer promotions. The primary objective of these incentive programs is to influence behavior of the end recipient.

What is Prepaid Card Breakage?

Within the context of prepaid incentive cards, breakage is the money loaded onto a card but not used by the card recipient by the time the card expires. The card can no longer be used for purchases at expiration even through the funds are still in the account. In the incentives industry, vendors will often take this unspent breakage as fee revenue. Breakage varies by program, but typically range between 8% to as high as 30%.

As a Manager of Corporate / Consumer Incentive Programs, Why Should You Care?

There are several ways to view breakage in the context of an incentive card program.

Business Philosophy – Misalignment with Incentive Program Objectives

The primary objective of any incentive program is to drive, incent, and reward certain behaviors. So when an incentive vendor relies on breakage as the primary source of program revenue, think about the paradigm that it sets. The vendor is financially incentivized to minimize the use of the reward that they received for the desired performance behavior. With incentive prepaid cards, spend is a measure of engagement with the program. So in other word – these vendors are better off if the incentive program drive less engagement – think about that. Whether consciously or sub-consciously, the vendor will manage the program towards less engagement because they are financially incentivized to do so.

Financial Impact – Price Transparency

Often, a vendor will bid on an incentive program with a low upfront per card fee, knowing that they will be able to take breakage as revenue.  Clients who do not know / understand breakage often do not know the economic model with which incentive services vendors operate. Incentive services companies are not charities – they do not work for free. So the question is whether the incentive program administrators are asking the right questions, and whether the incentive vendor is being transparent.

As an illustrative / simplified example, table 1 below outlines a typical scenario for an incentive / consumer promotion program (10K cards @ $100 each equating to $1MM in prepaid card funding). In this illustrative example, vendors may offer a low $1.95 per card fee but pocket the 15% in unspent funds as revenue when cards expire. Effectively, a corporate client is paying 69% higher all-in net effective card fees. Yes, the vendor is “making a bet” and the breakage rate of unspent funds is not guaranteed. Vendors are taking a risk, and arguably have a right to be compensated for that risk, but 69% higher?

Transparency is the Key

There can be legitimate benefits to operating under a breakage model (lower upfront cost, fixed budgets / costs, etc.). However,  transparency is the key – so before accepting an incentives services vendor’s offer of a $1.95 card, ask these questions:

  1. How does the vendor treat unspent funds / breakage? What is the real net effective cost?
  2. If you are designing your incentive program to maximize engagement, does it make any sense to design a program where the vendor is financially incentivized to drive down engagement?

Written by: Thomas Chiang, President | Card Services & Technology Solutions

Top 5 Reasons Your Incentive Should Swap Checks for Prepaid Cards

If you are using checks as a payment solution for your incentive or reward program, it might be time to make the switch to Prepaid Cards. Here are five reasons Prepaid Cards make a better incentive and reward program solution than checks:

A smart alternative to paper checks, Prepaid Cards are an ideal solution for organizations interested in a cost-effective, quick, and memorable way to reward their employees, customers, dealers and channels members. With a wide array of solutions, Prepaid Cards are a perfect fit for:

  • Rebates/Refund Programs
  • Consumer Promotions
  • Loyalty Rewards
  • Employee Rewards
  • Channel Incentives
  • Sales Incentives
  • Safety Rewards


Looking for more on Prepaid Cards? Keep reading:

Is the “Veruca Salt Complex” Influencing Gift Card Trends?

A Look at Prepaid Cards in Incentive, Rewards and Recognition Programs


For more information on Prepaid MasterCard® Solutions and how they can be customized to your goals, give us a call at 800.343.4546, or email us at jnrinfo@jnrcorp.com.


By JNR Incorporated

Written by Kelly Woolsey


JNR Incorporated is a results-based, globally recognized leader that specializes in creating custom travel, meeting, event, prepaid card and merchandise programs that motivate, engage and inspire the employees, customers and channel members of our clients. We have over 30 years of experience working with Fortune 500 companies of many diverse industries. Our programs are tailored to fit the specific needs of marketing, sales, management and human resource professionals. The unique solutions we apply are measurable and proven to increase performance, loyalty and revenues.



June 28, 2013. Irvine, CA.  JNR Incorporated, a leader in providing travel incentives, prepaid reward card programs, and marketing communications, reports a recent expansion in their Technology and Client Services Team.

“We are pleased to welcome our two newest all-star tech team members, Prax Cruz, Senior Web Designer, and JJ Kim, Front End Developer,” stated Heather Duckworth, H.R. Director at JNR. “Kim contributes an endless lineup of programming skills including: HTML5, Bootstrap, CSS3, WP, Dreamweaver, Fireworks, AJAX, Javascript, JSON, etc; while Prax joins the team as a veteran designer with years of development experience for ad agencies, businesses and in-house art departments under his belt.”

“JNR has placed an emphasis on expanding our technology offerings to stay ahead of client needs and industry trends,” states Duckworth. “In response to a large increase in the use of smart phones and tablets, we have created some cutting edge responsive design and mobile app solutions to facilitate a superior experience regardless of what type of device you are browsing on,” she stated.

JNR has also recently upgraded their travel registration capabilities into a comprehensive suite called “RegPort®.” This user-friendly system provides online participant registration with real-time data and confirmation collection, distribution of emails and SMS communications, management of participant data, in a customizable format.

Over the years, JNR has significantly improved results at some of the biggest and best known companies in the world through customized packages that include travel incentives, prepaid reward card programs, sales performance motivators, customer loyalty services, marketing, communications and advertising programs, and more.

“We invite you to discover how to improve revenues at your company,” Duckworth stated. For more information on creating a program that will motivate, engage and create loyalty among your team members, or for additional information on JNR’s Technology Solutions, contact us for a free consultation by emailing jnrinfo@jnrcorp.com 

Improve Employee Productivity with 5 Realistic Management Practices

The following 5 practices are simple steps management can take to improve employee productivity by putting their team to a better mindset.  It’s easier than you think to turn disengaged employees into dynamic team members.

  1. Design strategic incentive programs so employees at all levels of an organization can benefit. While it is natural for management to focus most heavily on senior level incentive programs, let’s not forget about substantive incentives for lower-level employees. Lower-level employees have a significant effect on an organization’s success. Successful incentive programs should be carefully structured so rewards clearly reflect revenue and objective targets, meaning they pay for themselves.
  2. Provide constructive feedback on a regular basis. The ability to provide regular, helpful feedback to employees in a manner that encourages, not discourages, is a cornerstone to effective management.  Unfortunately feedback isn’t always positive, but the level of thoughtful communication should remain the same for acknowledgment of good work or constructive criticism.
  3. Respect, respect, respect. Respect your employees as individuals in addition to the job they do. Employees who feel genuinely respected by their peers and management are more likely “to go the extra mile” to help their organization succeed.
  4. Provide support for employees when it is genuinely needed. Managerial support can take many forms: from providing employees with new equipment or software when existing is outdated or inefficient; flexibility for a reasonable level of work-life balance; or emotional support in the face of unfair criticism. This support will not be forgotten by employees and will build employee loyalty and goodwill.
  5. Talk the talk, and walk the walk. Ensure senior leadership models behavior that makes other employees be proud to be part of the team. Leaders are always being watched and judged; employees have keen eyes (and are keen gossipers). Nothing energizes employees more than a senior team they admire.

Motivating your employees is a delicate undertaking that requires the attention and experience of specialists in a variety of diverse industries. Outsourcing your program to a company with experts in travel planning, debit card distribution, marketing, web design, graphic design, and printing is one of the best investments you can make. Not only will you come out with a higher quality program, but it will be more cost effective and achieve greater return on investment.

Contact JNR today (http://www.jnrcorp.com/or call 800.343.4546) to learn about how our diverse team of experts can reinvigorate your channel incentive program.

  1. Incentive Travel
  2. Merchandise
  3. Marketing Communications
  4. Prepaid Reward Cards
  5. Web Services

Achieve Record Sales Revenues Through Channel Incentive Programs

Channel incentive programs are extremely powerful tools that can enable your company to surpass sales revenue goals. Your dealer owners and channel salespeople represent your bridge to the consumer, and their motivation to push your product over similar competitor offerings can be the difference between making the sale and losing out on potential business.

The two strategies through which you can stimulate sales of your product by your channel members include push and pull strategies.

Push Strategies

Push strategies essentially “push” your dealers to attempt to sell your product over competitor offerings. Every program centers around offering a channel incentive, either to the salesperson or consumer, which compels them to buy your brand.

Implement push strategies such as:

Travel Incentive Programs – Reward those dealership owners and channel salespeople who meet quota or win a competition with exquisitely planned VIP trips. They’ll feel like royalty, appreciated for their efforts, and motivated to succeed in the future.

Merchandise Programs – Engage and incentivize with lower ticket items such as sporting goods, electronics, clothing, and other fun and useful items. Custom branded merchandise leaves a nice personalized feel that increases brand awareness and serves as a constant reminder of your company’s generosity.

Training Programs – It is crucial to invest in training and educating those who are on the front lines trying to push your product. It’s no secret that salespeople who feel confident with knowledge of your product are more likely to suggest and upsell add-ons and premium offerings of your brand.

Pull Strategies

Pull strategies focus on the end user and attempt to inspire them to seek out your product. Instead of incentivizing your channel members, you will incentivize your channel members’ customers.

Space Advertising – Advertise and market your product offerings through direct mail, exhibitions, and other marketing communications that create demand. Strategically and aesthetically pleasing campaigns that utilize the appropriate mediums are crucial for success in this arena.

Rebate Programs – Engage customers by offering limited-time cash rebates to consumers that purchase your product from your distribution channel members. The most cost-effective and timely way to distribute these consumer rebates is by issuing prepaid debit cards. These incentive and reward cards can be set up to be accepted wherever a major provider is accepted or redeemable at a sole retailer.

Web Page Advertising – Outline the value and benefits of products on websites to increase communication. Highlighting benefits, rather than features, and creating professional, functional designs requires marketing, graphics, and web design teams to be involved and instrumental in the process.

Motivating your distribution channel owners and salespeople is a delicate undertaking that requires the attention and experience of specialists in a variety of diverse industries. Outsourcing your program to a company with experts in travel planning, debit card distribution, marketing, web design, graphic design, and printing is one of the best investments you can make. Not only will you come out with a higher quality program, but it will be more cost effective and achieve greater return on investment.

Contact JNR today (http://www.jnrcorp.com/or call 800.343.4546) to learn about how our diverse team of experts can reinvigorate your channel incentive program.

Incentive Travel


Marketing Communications

Prepaid Reward Cards

Web Services