Rebates and Consumer Reward Management

That is an interesting observation. The concensus is that there is still considerable growth in the gift card and stored value market. According a recently published report: "The U.S. Market for Prepaid Cards with a Focus on Gift Cards", published by Packaged Facts, consumer spending on Gift Cards is expected to hit $52.2 billion by 2012, up from $40 billion in 2007, with 67% of all consumers expected to purchase a Gift Card. The average yearly spend on Gift Cards is projected to rise to $326, up from 2007’s $288, with 35% of consumers expecting to spend ‘more’ in the future, 10% said they would spend "significantly more".

Also keep in mind that there are different categories of "gift cards" including open loop (American Express, Visa, MasterCard and Discover) and closed loop cards (store specific "gift cards") as well as other "stored value" products currently being used for payroll, medical benefits, welfare, disaster relief and other mass markets.

That being said, we feel very strongly that the next growth area will be Mobile Rewards and Payments, utilizing the massive base of wireless devices to drive consumer behavior, response and convenience.

We are currently developing mobile applications through our company for mobile couponing, loyalty and rewards that are managed through the device - and compliment our Green Initiatives, as there is no paper, postage or mail delivery involved. The critical missing element missing in the current plastic or physical Gift Card usage is that the user is considered to be anonymous, whereas with mobile couponing, we can track down to the device that is used for the reward, creating powerful CRM capabilities.

We are in exciting times and yes, technology will play a major role in the ongoing creation of reward and loyalty - as long as it is seamless and easy to use.

Just like any reward, a Gift Card or open loop Reward Card can create a point of difference and put your offering over the top to create a sale. You can easily design the program with various dollar amounts to put toward tiered purchase requirements.

If your organization and volume was large enough, you could create a customized open loop card that would drive your brand message as you reward your clients - or create your own gift card that is only redeemable at your studio, then send some out to key contacts to get their attention by offering an upfront discount.

From a retail perspective, the best way to grow your Gift Card sales is to make sure the Gift Card message is included in virtually everything you do, including all ads (print or media), website, newsletter and in-store signage. If you have the budget, themed cards (Valentine's Day; Mother's Day, Holiday...) are a great way to keep the cards topical and fresh.

The best way to make even your regulars 'want' one is to hold events where the use of the card is rewarded with specials -or a Swipe N Win contest with lots of random winners. Check with your card management company to see if they can enable that. It's fun in-store and generates a lot of attention to the card.

If you are a major chain, you should consider partnering with someone like Blackhawk Network to allow sales of your cards at other retailer's locations.

Both 6 and 12 months expirations are generally available. Considering the majority of spending on the card is within the first couple of weeks of receipt, the longer expiration date is more of a psychological benefit for the consumer which equals a better feeling about the reward, but it may be a little more costly for the sponsoring company to provide. We prefer to use the 12 month expiration whenever we can.

Great question! There are many advantages of using a plastic "reward" card over a check. The most important is the ability to customized a card - which literally takes your brand message and logo right to your customer's wallet. That's pretty powerful brand reinforcement. Once deposited, the value of a check goes to the consumer's bank account - but a reward card stays in their wallet and research shows it feels more like 'fun' money, giving them permission to splurge a little, thanks to your brand. When you personalize the card to the consumer's name, you are making a direct connection with your brand. In addition, cards that are lost or stolen can be quickly replaced, protecting your reward investment.

If you use a retailer's Gift Card, your customers can choose their reward at that specific chain. The cost to you might be a little more, but depending on local legislation, there may be no expiry date.

We frankly see no downside to using reward cards and offer a full range of cards to suit your needs and level of customization.