Prepaid cards are offering opportunities for c-store retailers in areas such as virtual gift cards, loyalty and more.
In 2019, c-stores can profit with open-loop prepaid card options, and by combining prepaid within their loyalty program—as a reward option and/or a way to pay via a mobile app, said C. Sue Brown, director, prepaid advisory service for Mercator Advisory Group Inc., a research and advisory services firm.
In addition, virtual gift cards continue to gain traction.
Combining prepaid with loyalty programs drives repeat business, retention and brand loyalty, Brown noted.
“If I just get a stamp on something I may or may not go back to that store, but if I have funds/dollars on a card, I will be sure to use them,” Brown said. “Also, depending on the prepaid card, if they are registered—meaning the card has the customer name on it—marketing can also be utilized to push advertisements and specials noting ‘we haven’t seen you in a while’ to customers.”
C-stores should offer open-loop in addition to closed-loop cards for specific stores in today’s disruption-filled environment where many retail establishments are going bankrupt, a trend pushing purchasers to open-loop options, which are good anywhere Visa/Mastercard is accepted, Brown said.
The Consumer Financial Protection Bureau (CFPB) prepaid rules go into effect this April after several delays, but are unlikely to impact retailers. The rules apply specific federal consumer protections, and prepaid-card packaging must now display specific disclosure information.
“Only general purpose reloadable (GPR), payroll and government-benefit cards are affected by the new regulations,” Brown said.
Yesway has experienced exponential growth in prepaid cards and gift cards due to the opening of additional stores over the past year, said Derek Gaskins, senior vice president of merchandising and procurement with Yesway, which operates 150 c-stores.
“Yesway offers a one-stop solution of prepaid cards and gift cards from major national brands to meet the needs of our customers of all ages,” Gaskins said. “The category includes, but is not limited to, financial entities (Visa Vanilla), wireless carriers (Verizon, AT&T and T-Mobile and TracFone), gaming firms (Sony PS4 and Xbox), third-party companies (Amazon, Cabela’s, Bass Pro Shops, Home Depot) and Yesway’s very own gift card.”
Yesway merchandises the prepaid cards on kiosks.
“Wireless cards are the most popular, followed by financial cards,” Gaskins said. “Yesway-branded gift cards are also very popular and provide customers a great gift option to make item and gas purchases at any Yesway store. We also offer fuel rewards through our loyalty program on third party gift cards, which helps to drive excitement and engagement during holidays and key events.”
Yesway also provides bill pay and money order services in select stores and is in the process of expanding and improving these services.