Prepaid cards and gift cards are taking the market at their fingertips. Day by day people are getting more inclined towards buying gift cards, rebate cards or promotional prepaid cards to save money and grab offers!
But how significant and important are these prepaid cards?
Do you really need them around, or you are better off with traditional debit and credit cards?
You might hear every now and then that if you shop goodies worth $500 or more at a particular store, then the store might gift you a promotional prepaid card, worth $25 or $50.
But why is that store so eager to promote their business by offering you a prepaid card?
To make things crystal clear I will be dividing this post into two sections. One part will deal with why prepaid cards are important from a company’s perspective, and the other will be from the consumer’s viewpoint.
Part- I
Why companies prefer promotional prepaid cards than traditional marketing?
Let me come straight to the point.
It is actually an 80-20 situation, where the company, that’s giving away the prepaid cards, benefits the maximum (say 80% benefit) than you (you are on the lower side with 20% benefit).
A company chooses promotional prepaid cards for marketing because:
Promotional prepaid cards have this Call-To-Action property that compels the consumer to take immediate action! These include buying more products for limited offers, or activating the card right away, which makes you a potential customer.
- The companies to track consumer mindset! Your purchases with that prepaid card will be accounted and the details will be used for the company’s benefits!
- The prepaid cards have a response rate much higher than discounted products, bonus points or coupons.
The promotional prepaid cards (also known as prepaid incentive cards) are designed to reward potential and profitable consumers, and sometimes the employees of the company. These promotional prepaid cards are simple, flexible and convenient to use!
The card's money can be redeemed and reloaded easily if the company wishes to do so for a better marketing prospect!
Incentive cards, gift cards, reward cards, promotional prepaid cards or whatever you would love to call them, also have other perks in addition to the above-mentioned benefits:
- The cards help to drive consumer traffic to any target store.
- The cards encourage consumer visits and help in repeat business for any particular product!
- Increase average purchase amounts.
- Help in building goodwill, and relationship marketing.
- Help to establish tasks like targeting a specific group of audience!
So, we have discussed the benefits for a company, if they market their products or business goals through promotional prepaid cards or gift cards or reward cards.
Part -II
Now we will see whether or not these promotional prepaid cards are good for us to buy!
I would like to start off with this small conversation that took place between two Wall Street Journal reporters, Tanya Rivero and Robin Sidel.
Here Tanya Rivero asks Robin Sidel to confirm that she has heard of a guy who uses prepaid cards and gift cards to pay off his mortgage.
In reply, Robin says, “ You can't pay mortgage with credit card, so he uses a third party vendor, so he’s still using a credit card to buy the gift cards to pay the mortgage”!
So that’s making it clear I guess that how badly you can eventually make use of your promotional prepaid cards!
But sidekicks and jokes apart, let’s talk about the real deal.
Pros and cons of falling for promotional prepaid cards:
The Pros:
- In general prepaid cards give you the freedom, from carrying cash with you, when you are on a trip or so!
- There’s no access to your checking account, so your bank vaults are safe, and you have got a certain limit, within which you can spend without worrying about interest charges and debts like you do with credit cards!
- Act as good gifts to give anyone you love. It will drop the brainstorming about what to give on your kid’s 16th birthday, or so. Moreover, it also takes away the awkward look from people’s faces when you give them liquid cash as gifts!
- With promotional prepaid cards, the offers and rewards are sometimes pretty cool to let go of! Like, say $50 off on a $150 purchase at one specific store!
- They are easy to use, and some cards are also reloadable.
- You can customize your prepaid card just as you want; you can add your pictures, your favorite quote, your name and whatever!
The cons:
- The hassle of activating them. As you might already know, these cards need to be activated and at times the online forms are quite troublesome!
- It takes away from you the freedom of making choices. So, if you have a Walmart card, then you can only buy from walmart and not from Amazon or anywhere else!
- They have expiry dates.If you think you can drag on your $200 prepaid card for 2 years, then that’s just not gonna happen!
- As promotional cards are displayed on racks at stores, scammers can easily take the code, reading it right away from the back of the card, and can later steal money once you buy and activate the card!
Now it’s completely up to you, if you are in for a promotional prepaid card or not.
But for your knowledge, these thin cards have become an acclaimed promotional strategy for companies and businesses!