Are Prepaid Cards Effective In Sales and Customer Loyalty Programs?


Prepaid Cards Better Than RewardsPrepaid Cards are quickly outpacing traditional employee and consumer recognition programs.  A “report completed by the Incentive Research Foundation” report completed by the Incentive Research Foundation (IRF), notes that prepaid cards are now “the most frequently used reward in corporate incentive programs”.

What explains this shift?

The IRF Report provides us with some insight into the migration away from traditional employee/consumer incentives – e.g. points programs, merchandise, travel programs –  which I’ve boiled down into two categories for ease of reference:


In today’s new economy, incentive programs must prove their worth, and demonstrate a measurable ROI in order to remain a line item in a company’s budget. The IRF report, in reference to several comparative studies of incentive programs, noted that “dollar for dollar, 
prepaid cards were the most effective form of reward“, in driving desired behavior.

While the IRF Report didn’t delve into any specifics as to why that was the case, the following strikes me as the most logical explanation:

  • Prepaid cards are usually branded with the company’s logo.  Every time the card is used, it serves as a reminder of where they got their reward, which in true Pavlovian fashion, reinforces the desired behavior from that individual.
  • In the same vein, prepaid cards give the recipient the ability to chose their reward rather than have a selection imposed on them. In most cases, the funds loaded onto prepaid cards are used as “fun money”, that doesn’t come out of an individual’s budget. Giving the recipients the power of choice on how to use their “fun money” is a highly effective way to foster brand loyalty and engagement.
  • The versatility of Prepaid cards make it so that everyone, not just the top performers/consumers, can be rewarded for the value they provide.  The rewards loaded onto these cards can be big or small, so, the program can easily scale to service clients and employees at all ends of the spectrum.

Ease of Use & Low Cost:

From a logistical point of view, prepaid cards are a much simpler and cost effective way of administering employee or consumer rewards, and have a much broader application than traditional rewards programs.  Prepaid cards can be used for:

Rebates to thank loyal customers, dealers or vendors

  • Consumer Promotions, Give-aways or Awards
  • Employee Rewards to recognize accomplishments, or sales targets met
  • Trade incentives (e.g. sales spiffs) to motivate dealers, distributors, vendors and other third parties to sell your products and services.

From a time and cost savings perspective:

  • It replaces having to write and send thousands of checks.
  • It replaces having to rifle through a catalogue of prizes, and allocating a point value to those items, which can be an administrative hassle.
  • Reduces payment delivery time. In some cases, payment can be made in less than 24 hours

Backtracking to our opening question: Are prepaid cards an effective tool to drive sales and customer and employee loyalty?  I believe the above speaks for itself, and my final verdict is a resounding YES!

Prepaid cards are a Potent, Flexible, Scalable and Cost Effective way to deliver consumer and employee rewards.  Adopting prepaid card will keep your business ahead of the curve and will pay dividends in renewed customer and employee loyalty and engagement.

Grace-Emily Saati 360 IncentivesGrace-Emily Saati is a Sales Channel Incentive Specialist with    Connect with Grace on Twitter@GraceEmilySaati or Google +.