Why Some Businesses See Better Results with Debit Rewards

by: Luke Kreitner June 7, 2016

When it comes to deciding how to reward the employees, customers, salespeople or channel partners in your incentive program, there are great arguments to be made for both merchandise rewards and debit card rewards. An ideal incentive reward system uses both merchandise and prepaid card rewards in order to maximize participants’ choices. But if you’d like to keep things simple and cost-effective, you can determine which reward type is best for your business by looking at how frequently you reward participants, why you’re rewarding them and how widespread your participant base is. With these things in mind, prepaid card and debit rewards have a few qualities that make them better suited to some businesses than others:

Better Results with Debit Rewards

1.Debit rewards can be branded.

Much fuss is made about the “braggability” of merchandise and travel rewards, but the brand mindshare potential of prepaid card rewards is often overlooked. Studies have shown that personalized branding and packaging make incentive card marketing efforts more effective. Not only this but when you brand your prepaid card rewards with your company logo, it strengthens the association between your company and the gratification of rewards. Every time participants use their prepaid cards, it reinforces their identification with and loyalty to your brand.

2. Prepaid and debit rewards can be used on both luxuries and necessities.

Organizations who study trends in reward and incentive programs have found that program participants prefer debit card rewards during times of economic hardship. An Incentive Research Foundation (IRF) study conducted during 2008 reported that 21% of companies increased their use of prepaid or debit card rewards, compared to just 9% who expanded their merchandise rewards offerings.

During the recession, more people needed to apply extra funds towards bills, gas and groceries, making prepaid card and debit rewards a more attractive reward option. Although the economy is recovering, consumers’ tendency toward less exorbitant spending has remained. A 2014 Consumer Reports study found that Americans now habitually cut back in many ways: “People are going longer than they used to between haircuts (41%), taking ‘staycations’ rather than big trips (43%), and packing a brown-bag lunch instead of eating out (48%). The biggest cutback? Fifty-seven percent of women we surveyed said they are painting their own nails rather than going to the salon.”
With these societal preferences taking hold of post-recession consumers, it’s likely that more and more incentive program participant bases will find prepaid card rewards appealing. They can spend their hard-earned rewards on food or fuel then, if they have reward funds left over, splurge on something a little more indulgent.

3. Debit rewards are perfect for quick sales incentive SPIFs.

Prepaid reward cards are ideal for time-sensitive sales incentive promotions, such as sales performance incentive funds (SPIFs). Prepaid card rewards present a more compelling call-to-action than accumulative, points-based rewards. In a FirstData study, the company found that incentive card marketing efforts were more effective than other types of rewards, such as discounts.

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FirstData proposed that this is because “an incentive card is immediate, meaning a consumer can use it as soon as it is activated.” If you want your salespeople to act quickly to boost sales of a particular product or service, debit and prepaid cards are one of the most compelling, motivating rewards you can offer.
According to Incentive Solutions CEO Steve Damerow, “Prepaid cards are the most effective reward for short-term initiatives, such as SPIFs, that last no longer than six weeks. Prepaid cards are a reward that people are already familiar with prepaid cards. There’s no learning curve and no accumulation phase. Participants earn rewards immediately.”

4. They make international reward programs more efficient.

Those with international incentive program participants may find it difficult to reward their overseas affiliates using merchandise rewards. There may be language barriers to consider and, on top of that, shipping items across borders from U.S. vendors increases chances that items will be trapped in customs hell or intercepted and stolen. International shipping also greatly dilutes the powerful instant gratification effect of earning rewards. Effective, flexible prepaid and debit reward programs have virtual e-card options. Luke Kreitner, VP of Sales at Incentive Solutions, explains, “Virtual cards have codes that can be emailed directly to reward recipients, so you avoid the costs of distributing plastic. Overseas program participants can instantly receive and activate their cards. They don’t have to bother with international shipping because they can use their cards in online stores and in local shops, wherever the card is accepted.”

As you initiate or make changes to your incentive program rewards, keep the above four advantages in mind when considering prepaid and debit reward options. Merchandise and travel rewards are very exciting, but often the practical, cost-effective and flexible qualities of prepaid cards make them the smarter reward option.

For more information on which type of rewards are best for your company’s current or potential incentive program, call us at 866-567-7432 or fill out our online contact form anytime.


About Luke Kreitner

Luke Kreitner is the VP of Sales at Incentive Solutions, an Atlanta-based incentive company that specializes in helping B2B businesses accelerate growth, increase sales, motivate channel partners and retain B2B customers.