Prepaid shopping is on the rise, and research conducted by Aite Group (in partnership with InComm) has revealed that most merchants are considering adding to their prepaid programs. Aite Group has discovered three prime opportunities for merchants to maximize revenue from prepaid programs.
1. Consider branching out
Most merchants prefer to sell their own brand of cards that can only be spent at that specific retailer. Although this may generate repeat business and additional revenue, offering cards for non-competitors or sister stores can be another way to generate revenue without cannibalizing in-store sales. Aite’s research indicates that restaurants, specialty retailers and travel service providers are the most likely to offer their own brand, therefore they are the best positioned to drive additional revenue through offering other brands’ closed loop cards.
2. Expand digital offerings
A recent InComm survey found that 55% of customers are interested in using digital gift cards on their phones. Many merchants are planning to increase digital gift card offerings through mobile and online channels. 44% of merchants believe that digital gift cards are important and list them as a top priority, but roughly a quarter do not believe that digital gift cards are of great importance. Merchants who ignore the digital gift card trend are likely to miss out on significant prepaid revenue.
3. Loyalty program rewards
Although selling gift cards is one way to increase revenue, giving gift cards for small amounts away as a loyalty rewards is another. This works in two ways. The possibility of earning rewards drives sales, as does the redemption of those rewards. Of merchants surveyed, 60% indicated that incorporating digital gift cards into loyalty programs is important and should be a top priority.