The prepaid card category has continued to fare relatively well at many c-stores during the pandemic — for gift-giving, budgeting and as part of loyalty programs, with accelerated interest in digital versions.
“Because c-stores and pharmacies stayed open when many other locations were closed, c-stores naturally had a larger portion of the total market than in the past,” said Perry Kramer, managing partner at Retail Consulting Partners. “Additionally, we were seeing an increase in the use of prepaid cards, as they were perceived as faster than cash, and speed has equated to safety for many consumers during this pandemic.”
The use of both open- and closed-loop cards is growing, and many retailers continue to market closed-loop credit cards as a way to capture and enhance their loyalty systems. However, open-loop cards’ growth — both branded and unbranded — has out-paced the growth of closed-loop cards about two to one, said Kramer.
Part of this growth can be attributed to the movement of the EMV deadline, which gave many retailers the time they needed to implement this new hardware/software prior to the compliance date, which includes contactless EMV.
“This implementation parallels with the major card brands issuing contactless cards, which plays right into the sweet spot of this generation, which loves contactless,” Kramer said. “This will contribute to the growth of any card that supports contactless and/or being loaded to a mobile wallet.”
Prepaid cards also serve as a tool for people who are under- or un-banked. In April 2020, 7-Eleven added a new prepaid card to its offer, [email protected] by 7-Eleven Prepaid Mastercard, as a way for these customers to receive direct deposit payments including stimulus checks.
The card can be purchased at 7-Eleven stores or online. Money can be loaded onto the card at any 7-Eleven store, and it can be used anywhere that Debit Mastercard is accepted. Plus, 7Rewards loyalty program members can link their account to the [email protected] by 7-Eleven card to earn points that can be redeemed for 7-Eleven merchandise.
Tips and Tricks
While Good Oil Co. Director of Marketing & Foodservice Mike Jones said the company’s Good to Go c-stores, with 14 locations in Indiana and Illinois, have not seen a significant increase to sales for the prepaid category since the pandemic began, he expects sales to rise later this year. The c-store chain offers both retail and mall gift cards as well as prepaid phone and loadable Visa cards.
Kramer recommended that c-stores merchandise a display of greeting cards near the prepaid gift card display to grow sales of both categories, while increasing inventory on pandemic-friendly gift cards.
“If you do not have strong reporting or monitoring of what prepaid stock is selling/on display, consider paying the extra fee to have the vendor stock the prepaid gift cards,” he said. “We have seen sales increase by as much as 22% when this change was implemented to correct out-of-stocks caused by store personnel never filling the racks or reorders never being properly generated.”