Making the Case for Working With Gift Card Resellers
By Agatha Gilmore
January 13, 2014
With incentive budgets rising and the popularity of gift cards holding steady, the future is bright for the gift card market.
Already in 2013, the percentage of companies using gift cards in their
incentive programs grew to 77.9 percent, up from about 76 percent in 2012, according to Incentive’s2013 “Gift Card IQ” survey
, which was completed in October 2013. Furthermore, 30.4 percent of respondents said their 2013 budgets were higher than in the previous year, compared with just 20.1 percent reporting higher budgets in 2012. According to research released in December by CEB TowerGroup, gift card sales topped $118 billion in the U.S. in 2013, an increase of 7.9 percent over 2012, with projections of sales reaching $140 billion by 2016.
“For 2014, we are expecting continued growth in both the consumer gifting and corporate incentive areas,” says Jim Leroux, president of Des Plaines, IL-based gift card reseller SVM. “For corporate incentives, we are expecting double-digit growth in terms of gift card load volumes.”
Just over 10 percent of respondents said they purchase gift cards from resellers like SVM. One of the key advantages to working with a reseller is that it offers a one-stop shop for busy managers looking to consolidate a diverse array of offerings, says Rich Killian, president and founder of Orlando-based RK Incentives.
“We are also seeing a trend toward innovative gift-card solutions that are designed to make life easier for incentive program operators,” Leroux adds. “This includes turn-key gift-card program management solutions providing program operators with efficient and cost-effective access to a wide selection of brands and professional fulfillment services from a single source. This also includes solutions designed to offer more frequent repeat engagements, such as reloadable gasoline cards.”
Reduced pricing is also a bonus, Killian adds. “With most of the brands I represent, I am able to offer a better and/or equal discount,” Killian says. “If you are a gift card buyer, I encourage you to shop around and price all of your options with a reseller.”
Both experts agree that plastic cards remain more popular than e-gift cards, with e-gift-card adoption growing but at a slower pace than originally expected. “In the B2B gift-card market, plastic sales will remain strong and dominate digital sales for several more years,” Killian says.
Leroux adds that cards for “everyday” spending — such as gasoline, grocery, coffee, and big-box stores — still win out in popularity over “trophy” cards for more luxury brands.
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