The versatility of debit cards makes them one of the most popular and universal rewards in the incentive industry. The Incentive Gift Card Council (IGCC) found that gift cards are used in a wide variety of incentive rewards, including performance recognition, sales incentives, consumer promotions, dealer incentives, and safety awards. Incentive companies like Incentive Solutions offer prepaid cards in multiple forms, including VISA® debit cards, gift cards, and virtual cards. In this article, we will discuss why prepaid debit and gift cards are enticing reward options; when they are best used as incentives; and when other types of incentives are preferable.
Advantages and Disadvantages
• Compared to Compensation Rewards
Compared to compensation bonuses, prepaid cards are more memorable and they leave a longer-lasting impression on the recipient. While cash bonuses tend to barely change hands before they’re quickly spent and mentally lumped in with salary, prepaid debit and gift cards stand out. Prepaid cards can be personalized and branded to the client so that recipients’ success has a “footprint” they see every time they use their card. Reinforcing the sense of achievement creates a motivation loop: users are attached to their reward and, rather than using it to help pay the bills then forgetting it, they want to earn it again and again.
• Compared to Merchandise and Travel Rewards
Prepaid card incentives also have a few advantages over merchandise rewards. Non-cash rewards like merchandise and travel are extremely influential because of their visibility and trophy value, but prepaid cards are more versatile. Participants in rewards programs can use prepaid cards at their leisure and, with an Incentive Solutions prepaid VISA® debit card that’s useable wherever the VISA® brand is accepted, their redemption options are vast.
When Is It Best to Use Prepaid Cards?
How do you know if a prepaid card reward is the best reward option for your particular incentive program? According to Incentive Solutions CEO Steve Damerow, there are a few conditions under which prepaid cards are the best choice. “Prepaid cards work best for a short-term promotion, such as SPIFs, that lasts about a month to six weeks. Prepaid cards are a reward that people already understand very well and they want to earn immediately. There’s no need for an accumulation period.”
Debit and gift cards also work very well in an international business environment, Damerow says, because of Incentive Solutions’ virtual card option. “Virtual cards consist of an e-code, eliminating the expense of distributing plastic cards. Overseas program participants don’t have to wait for their card to be delivered, and they don’t have to face the inconveniences of international shipping when they can use their cards on local, online stores.”
For long-term incentive programs like customer loyalty rewards, merchandise and travel rewards work better because participants can bankroll the points (or cyber currency) they earn gradually. Damerow says, “For milestone programs like customer loyalty rewards, you can amass points over the course of two, three years. That’s how you save up for an iMac or a Hawaii trip on your wishlist.”
The unique advantage of prepaid card incentives is they are tangible, visible rewards that can be branded and customized, but they are still nearly as flexible as cash. These advantages are best utilized in short-term promotions and/or international incentive programs. A prepaid card is an immediate reward participants don’t have to wait to receive, and it still carries its own distinctive wallet mind share.