Retail
Survey: Prepaid Cards Beat Cash as Awards of Choice
By Alex Palmer
September 15, 2011
Cash has nothing on prepaid spending cards, according to new research from Edina, MN-based incentive marketing firm Young America, which finds that 46 percent of human resources executives are using prepaid cards for awards in their incentive and reward programs, while only 33 percent are using cash.
The research, released on Sept. 14, drew on the responses of 355 executives in the human resources, sales, or marketing departments at U.S.-based companies that offer incentive programs for their employees.
It found a high level of interest in prepaid cards particularly, with 43 percent of employers saying they would use a new prepaid card program for employee recognition in addition to what they already offer. Forty-eight percent of respondents said they would add prepaid cards in place of other types of employee rewards.
“Certainly, this year, relative to the couple past years, interest in incentive programs has started to grow,” says Joe Custer, president of Young America. “The preference [for prepaid cards] did certainly surprise us and made us think about how we are commercializing this demand as far as opportunities with clients and prospects.”
Custer emphasizes that Young America is “award agnostic” in its offerings, making sure to offer travel, merchandise, gift cards, and prepaid cards to clients and let them determine what the best fit is for their programs. But the strong showing by prepaid cards in this latest survey is something the company plans to capitalize on when promoting program ideas to HR executives.
Part of the allure of prepaid cards during difficult economic times may be their flexible price points (costing anywhere from $5 to $5,000), as well as their practical use for employees, according to Custer.
“[These results] won’t change what we offer, but it might change how deep we go within a respective offering,” says Custer. “We will be looking at cards in general and what are the types of cards that can be provided to clients. We want to make sure that we have the most competitive form of marketing.”
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