It isn’t new for us to hear that prepaid cards are great motivators and incentives. But a new loyalty and prepaid survey reveals just how much prepaid has affected consumer spending habits and long term adoption when used in the B2B space as incentives. Here, we outline some of the most interesting tidbits and pair them with our market observations and viewpoints. Let us know your thoughts via the comments field.
“Prepaid cards are proving to be effective at motivating customers and employees to share positive feedback with their peers and social networks, among other behaviors.” Social media is proving to be a great way for customers to “Like” their favorite brands and retailers. In return, brands are using gift cards to reward this kind of loyalty and it starts becoming a way to attract new customers.
We are also finding that prepaid and gift cards are offered over social media networks as part of workplace reward programs like nominating coworkers or teams for special accomplishments, redeeming “on-the-spot” rewards, and recognizing managers for good work and achievements.
On spending patterns; these study points speak for themselves:
- For consumers who had received a card as part of a contest or drawing, 43% ended up spending more than the value of the card.
- 28% of consumers with incomes of $100,000 or more said they would be willing to make a purchase of three times the value of a $25 card.
- While only 33% of respondents indicated they preferred a prepaid card instead of a check when receiving a rebate, that number climbed to more than 40% among consumers who had already received and used a prepaid card as part of an incentive or rebate offer.
Stated simply, the more cards consumers receive, the more they want, as there was a direct relationship between experience with prepaid and preference towards the cards. “Although some consumers may be receiving prepaid cards as an incentive for the first time, the survey showed that most are quick to cash in on the value of the card, as 7 in 10 used the card within three months.”
At GCP, we’re seeing a shift in thinking about breakage. At one time, breakage was seen as a positive thing, however, we now look at it as a missed opportunity to gain happy customers, brand loyalty and the increased sales beyond the denomination of the gift card.
The report discussed here was prepared by Retail TouchPoints and commissioned by TSYS. Click here for the full Loyalty & Prepaid study findings & report.