CNP Expo: Think You Know Prepaid? Think Digital, Think Mobile
May 22, 2014
Gift cards, both digital and physical, spur greater purchases for retailers—a concept called “lift,” which is when a person uses a gift card but spends extra cash at the retailer.
“We’re seeing an explosion in the variety of things retailers are doing with gift cards,” said Pete Kledaras, chief risk officer of CashStar. “Retailers are only now beginning to leverage those.”
In addition to making purchases, the cards can be used to instantly transfer cash anywhere in the world and the money can be spent online or in stores. Shoppers can even print out a digital gift card and take it to store.
“We use the gift card to promote our loyalty program,” David Libenson of Aéropostale said Thursday at a panel discussion during CNP EXPO. “It becomes part of the marketing program.”
And, mobile phone technology will extend the reach of those marketing programs and significantly increase the number of gift cards purchased. Gift cards are more likely to become digital in the future. And, panelists said they have even seen that digital cards are replacing checking accounts for younger people.
“Over time we have seen a higher percent of the virtual card being purchased over the plastic,” Libenson said. “The customer wants now. That’s the now.”
But both panelists urged merchants to resist rushing into a digital campaign without a proactive marketing plan.
“If you want to offer digital gift cards, come up with a good marketing program,” Kledaras said. “Don’t do it just because everyone else is.”