Prepaid cards — also called open loop prepaid cards — are network branded (Visa® and MasterCard®), reloadable and can be used at any merchant location that accepts those brands. In addition to purchasing goods, consumers can also use these cards for withdrawing cash at ATMs and other bank-related activities.
Popular with consumers, personal-use prepaid cards complement the debit and credit cards already in their wallets, or they can be used as a readily-accessible and safe alternative to carrying cash. And since they carry the widely-accepted Visa and MasterCard logos, merchants can process them in payment just as they would a network-branded credit or debit card.
Gift and Loyalty Cards
Another category of card-based payment options is gift and loyalty cards. Also referred to as closed loop prepaid cards, they enable virtually any merchant to expand their capabilities and grow their business.
The closed loop gift card program offered to merchants by TransFirst® through Valutec® features pre-designed or custom cards, and targets virtually any retail or restaurant merchant. The loyalty card program features point-to-dollar conversion that works well for grocery stores, small retail chains, car washes and other retailers.
Because most cardholders spend more than the value loaded on their card, these programs can have the potential to represent increased sales and profitability for participating merchants.
Gift and loyalty cards are the same size, made of the same plastic material and process like credit, debit and prepaid cards, but there are some important differences.
Gift cards aren’t just for holiday giving anymore. Birthdays, graduations, weddings, special celebrations like Mother’s Day and Father’s Day and other milestones are all special occasions for giving gift cards.
Like credit and debit cards, gift cards come equipped with a magnetic stripe so they can be swiped through a cardreader at the point of sale. A customer purchases a gift card loaded with a specific amount of value and then gives it to someone who can use it to make purchases at your business. Some shoppers buy the cards for their own use and a convenient way to pay for future purchases.
This year-round gift card phenomenon is a ready-made market for merchants and businesses. Recent statistics reveal that:
- Prepaid cards, which encompass gift and loyalty cards, are the fastest-growing segment of the financial services market.
- Gift card displays are the most profitable square foot of selling space at many retail sites.
- Purchases made with a gift card tend to be between 20 and 50 percent higher than the average purchase price.
- Over half of all shoppers spend more than the initial value of the card. The average “uplift” is 133 percent of the stored value.
- Forty percent of gift card recipients do not use the full amount on their card; in fact, between 2005 and 2011, $41 billion in gift cards went unused. This “breakage” is pure profit for the merchant issuer.
Loyalty cards — also referred to as rewards cards, discount cards or club cards — typically feature a barcode or magnetic stripe for scanning. A merchant loads a closed loop prepaid loyalty card with a specific value and gives it to a customer, providing them a strong incentive to continue frequenting the business to rack up more rewards by following the rules set by the merchant. The customer ultimately redeems the rewards, which are most often a monetary addition to the card or free merchandise, when the point accumulations reach a predefined threshold.
Adding loyalty cards to your prepaid card program enables you to track the buying behavior of your customers, converting sales to points to incentivize repeat purchases in your retail locations. They’re also a simple way to show your appreciation to loyal customers for their patronage and a great way to attract new customers. Loyalty cards should be a top priority for all businesses because they can help drive profits and improve cash flow.
Gift and Loyalty Card Options
Choose from generic, pre-designed cards customized with your business name, or create your own custom-designed cards and displays with your unique branding, logos and more. Depending on the option you choose, you can be selling or distributing gift and loyalty cards in as little as three business days after you place your order.
Consider the following benefits of gift and loyalty cards for your business:
- Potential for increased sales and revenue from new and existing customers.
- Custom-designed cards become part your overall marketing program to enhance your business’s credibility and visibility.
- Satisfied customers purchase and distribute more gift cards, driving additional new customers to your business.
- Gift card recipients may reload card for future purchases at your business.
- Loyalty card recipients are likely to shop more often to earn more rewards.
- Additional revenue possible from gift card balances that are never redeemed.
The gift and loyalty card programs offered through TransFirst provide 24/7 customer support from Valutec to resolve any questions or issues you may have. User activation requirements and card security features minimize the risk of theft or fraudulent purchases.
Whether you’re ready to purchase 100 cards or thousands, TransFirst can get you started in gift and loyalty card processing. Let one of our representatives facilitate your move today by completing the form on this page to learn more about how these cards can benefit your business.