Buyer’s guide to Electronic vouchers

Electronic gift vouchers are growing in popularity over their paper counterparts, and now employees may not even need any plastic to cash in on the perk, says Tynan Barton

The market for gift vouchers is growing as employers recognise their importance in engaging and motivating staff. The move away from paper vouchers to electronic voucher motivation cards is also continuing.

There are three main types of electronic voucher card: closed loop, open loop and restricted loop. Closed-loop cards are redeemable at one specific retailer, for example Sainsbury’s or Boots. Open-loop cards use either the Mastercard or Visa payment network, and are accepted at multiple retailers. Restricted-use cards can be used at a selected group of retailers.

Mark Towler, head of business incentives at House of Fraser, says it is important to offer staff choice in order to boost engagement. “Employers are having to understand employees a lot more in order to motivate and incentivise them. It is about choice and what is important to people.”

Electronic voucher cards take away a lot of the work involved in providing and distributing paper vouchers, and retailers receive immediate reimbursement. Martin Cooper, head of national accounts and marketing at Love2reward, says: “For retailers, it is a big job to count all those vouchers. With a card, they get paid promptly and it is all done electronically.”

Cards offer better security

Electronic voucher cards are also becoming more popular because of better security. They can be sent out without any value loaded onto them and once staff have received them, the provider activates them with the required amount. John Sylvester, director, motivation division at P&MM, says: “We can issue cards inactive, and activate and load them once they have been received by the rightful owner. Sending £300 worth of vouchers is like sending cash through the post and has to have a secure mechanism.”

Another trend is to provide an electronic voucher by emailing a code that allows staff to shop online. Wayne Harrington, product manager at Edenred (Incentives and Motivation), says: “The growth in people using online as a shopping portal makes the product more viable.”

Employers can order voucher codes in bulk and distribute them to staff, or inform their provider of the recipient’s email address to distribute them directly. The electronic code method offers speed of distribution, because the email is received instantly, as well as greater security because the email cannot be lost as easily in the distribution process. It is also more environmentally friendly. Steven Baker, head of reward and recognition at Projectlink

Motivation, says: “It fits with a lot of corporate social responsibility programmes, particularly around sustainability and environmental impact.”

On top of the face value, the cost of providing electronic voucher cards is about £1.50 per employee, depending on the size of the workforce. This covers the set-up of the scheme and distribution, as well as any employer branding. P&MM’s Sylvester says: “This is about encouraging employee loyalty, so it is useful to ensure when they use the card, they are reminded of how they are receiving those benefits.”


Key facts

What are electronic voucher cards?
Electronic voucher cards can be offered to employees as part of an incentive scheme or through salary deduction. The cards can be redeemed in shops, leisure and travel retailers.

They can be programmed for use at a specific retailer, multiple retailers, or at a selected group of retailers.

Where can employers get more information?

The UK Gift Card and Voucher Association has more information on its website. View more articles on motivation.

Who are the main providers?

Electronic voucher cards for use at single retailers are provided by: Arcadia, Asda, Boots, B&Q, Debenhams, Fresh Travel, HMV, House of Fraser, John Lewis, Marks and Spencer, New Look and Thomas Cook.
Cards for use at multiple retailers are provided by: Edenred (Incentives and Motivation), Grass Roots, Logbuy, Love2reward, Michael C Fina, One4All, P&MM, PrePay Solutions, Projectlink Motivation and SVM Cards.

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