Who is the right target market for pre-paid cards?

If you read nothing else, read this…

  • Older employees welcome discounts to make savings on the cost of everyday living, including supermarket shopping and fuel.
  • Younger employees are more likely to use discounts to buy big-ticket and memorable items.
  • Cashback features on pre-paid cards can make them more appealing to a larger proportion of the workforce.
  • Retail discounts and pre-paid cards are commonly used to motivate employees in call centres, which tend to have younger workforces.


Cards or vouchers offering retail discounts appeal to different age ranges of staff in different ways, says Nicola Sullivan
Retail discounts, such as pre-paid cards, store cards and retail vouchers, are more appealing to certain groups of employees than compensation and benefits professionals realise.

Analysis by benefits consultancy Towers Watson found that retail vouchers and cards offered through flexible benefits schemes appealed more to older staff on higher salaries.

The research, conducted in January and based on data collected from 20 employers representing 50,000 employees, shows staff were four times more likely to choose retail discounts if they earned £75,000 a year compared with those earning £25,000. It also found that discounts were more popular with staff aged between 30 and 50, who were about five times more likely to select the vouchers than employees under the age of 25.

Paul Brown, a senior consultant at Towers Watson, says: ‚ÄúThis does not necessarily match what we expected. We thought [retail discounts] were a benefit for younger people.‚ÄĚ

High-earning employees in older age groups tend to select discounts that save them money on everyday living costs, says Brown. ‚ÄúPeople in a higher salary band use [vouchers and cards] for discounts on everyday products,‚ÄĚ he says. ‚ÄúThey will use them in the supermarket, for food shopping or fuel.‚ÄĚ

Towers Watson also found younger employees were more likely to use discounts to save money at Christmas or to buy big-ticket items such as televisions.

Out of the ordinary

Andrew Johnson, director general of the UK Gift Card and Voucher Association, agrees younger staff are more likely to use retail discount cards to treat themselves. ‚ÄúBuying something that is a treat and out of the ordinary is likely to be more memorable,‚ÄĚ he adds.

This makes cards for retailers such as HMV and Argos an important part of reward and recognition in call centres, which typically have younger staff, says Johnson.

Employers that want to use single-branded cards in a scheme, rather than cards that can be used at multiple retailers, need to know their workforce, says Colin Hodgson, sales director, incentives and motivation, at Edenred. ‚ÄúIt isn‚Äôt easy to know or second-guess where somebody would like to spend it today or would like to spend it tomorrow,‚ÄĚ he says. ‚ÄúIt is about knowing who your audience is.‚ÄĚ

Another way to tailor retail discount cards for the individual is through personalisation, says Hodgson. ‚ÄúIt not just the name that can appear at the bottom of the card, it can also be the organisation‚Äôs corporate branding and incentive identity,‚ÄĚ he explains.

Kuljit Kaur, head of business development at P&MM, says the cashback often available on pre-paid cards, which are loaded with points that can be exchanged for goods or experiences, adds to their appeal. For example, P&MM‚Äôs Spree card offers cashback ranging from 3% to 15% at certain retailers. ‚ÄúIf staff go to these retailers, they get cashback that will be loaded onto the card,‚ÄĚ says Kaur. ‚ÄúThe more you use it, the more cashback you get.‚ÄĚ

Delivery mechanisms are changing too, as technology advances. Accordingly, Barclays has launched a money-sending service that allows its UK current account customers to send and receive cash through their smartphones. Motivation providers such as P&MM are following suit, looking at developing applications (apps) for smartphones that will enable employees to make direct purchases.

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In the meantime, employers would do well to identify which groups of staff use retail discounts, to ensure the success of any card scheme they add to their benefits package.

Read more on staff motivation