Gift cards continue to play an extremely important role in incentive marketing.
Last year alone, the North American corporate market spent over $80 billion on incentives – including merchandise, experiences, and gift cards. Everyone has used a gift card at some point in their lives; gift cards are as ubiquitous as cash
or cards at modern retails stores.
Though gift cards have certainly become a staple in incentive marketing, there’s one issue: they’re still exactly the same as they were in 1996. As times change, so too must the devices and marketing tools businesses use.
Does that mean that gift cards are on their way out?
No. The fact is, gift cards still work. In terms of customer satisfaction and industry growth, nothing ranks higher than an open-loop gift card.
According to a CPPO survey:
- Open-loop cards are the top holiday gift.
- 79 percent of Canadian say they would like to receive an open loop incentive card.
- 95 percent of Canadians say that they are satisfied with incentive cards, which is the highest satisfaction rate out of all payment tools.
At this point, you may be asking yourself, “What exactly is an open-loop card?”
When a person thinks of their regular, run-of-the-mill gift card, they are actually thinking about a closed-loop card. Basically, it’s a single-merchant card that is typically non-reloadable. They often feature the logo and branding of a specific company, such
as a restaurant or retail chain and can only be used at that brand’s locations. These are exceptional for retailers who get money back in their pocket, but for businesses offering incentives, they leave a lot to be desired.
When a person thinks of their regular, run-of-the-mill gift card, they are actually thinking about a closed-loop card.
An open-loop incentive card, on the other hand, can be used at millions of places around the world, both in-store and online. As a result, open-loop cards are much more flexible and have mass appeal, as they can appeal to individual needs across millions of
recipients. Maybe that’s why 78 percent of Canadians prefer them over their closed loop counterpart (CPPO).
Open-loop cards are loaded electronically and can be reloaded with additional funds, loyalty/ rewards /incentives programs. According to recent research, people prefer open-loop prepaid reward cards over all other reward options, at all dollar values. You
can get what you want, where you want, whenever you want.
Consumers want more
People want convenience, choice, and instant gratification. Consumers want to be able to make purchases online, or anywhere else, for that matter. The cards should be easy to use and easy to redeem.
Incentive programs play a popular role in improving a customer’s loyalty and retention. According to Yotpo, loyalty and rewards perks make up 35 percent of a consumer’s consideration of trying a new brand or product.
Gone are the days where your customer should be fumbling around with a giant wallet full of receipts, coupons, and dozens of plastic gift cards like George Constanza in Seinfeld. It’s time to take the gift card out of the Stone Age.