Gift Cards Go Mainstream
CUs cash in on gift cards’ convenience and contemporary designs.
Gift cards have become one of America’s great impulse and last-minute buys. So it’s no surprise that almost anywhere consumers go—gas stations, supermarkets, drugstores—they run into racks of them.
Because it’s so easy for consumers to find gift cards, you might think credit unions don’t really have a place to put a dog in this fight.
But you’d be surprised: Many credit unions are cashing in on gift cards by taking advantage of offerings and insights from credit union-oriented vendors.
“Gift cards are a basic part of society’s fabric now,” says John Dwyer, regional sales manager at CPI Card Group.
He says there are two main types of cards:
• Open loop, which can be used anywhere, like a debit card; and
• Closed loop, which can only be used at the issuing retailer.
While open loop is the category where credit unions can compete, for the most part “they’re less a revenue generator than a convenience for members, and another way to get members physically into a branch,” says Jeff Falk, director of product development at The Members Group. “Our model prefers that approach—getting the member to come in to buy a card—rather than having them go to a website, select a card and amount, and then wait for the card to arrive.”
Who buys gift cards? For the most part, Falk says, people pressed for time.
“Five years ago the uptick on gift card sales would start on Black Friday, when we’d see a huge spike,” he says. “Now that consumers realize the cards are always available, we’re seeing a more gradual spike after Thanksgiving as they put off buying them until much closer to Christmas. They may literally be driving to Grandma’s house for holiday dinner and pick up some cards along the way.”
Next: What vendors offer
What vendors offer
Vendors support credit union gift card offerings in a variety of ways. The Members Group offers two main products:
1. A turnkey program that includes generic card designs, packaging, point-of-sale materials, and Web applications.
2. A customized materials package that allows card designs to match credit union branding and colors. It costs more because production takes longer and is more involved.
The Members Group offers add-on features to make gift card purchases more enticing. “We’ve designed a passport-sized ‘book’ to put a card in. The book has a pocket for the card, a purchases register, and a list of frequently asked questions. Because the giver can wrap and decorate the book, it has the look and heft of a more conventional gift rather than the lightweight look of a simple envelope.”
CPI operates a printing plant in Didier, Ind., specifically built to support credit unions and similar markets. It specializes in small runs, typically from 5,000 to 25,000 (although it can go smaller or much larger) as well as runs involving multiple versions and card design specialties, Dwyer explains.
At the preprint stage, the company offers Card Designer—a Web-based software that allows credit unions to create and store their own card designs, and then order a printing run at will.
Next: Card design
Dwyer says smaller runs almost always entail greater involvement by his company in card designs. “That’s because most design agencies aren’t as well versed in what works with card design, both aesthetically and functionally.”
He recalls a bank customer that wanted a four-color vignette on the back of a card that would have called for such close registry and color consistency that it would have been very expensive across the run. “We persuaded the client that a simple, one-color grey scale would work just as well in terms of visual appeal.”
A common mistake is placing too many branding elements on a gift card, Dwyer adds. “Cards are a small medium, and it takes a good eye for design to know how much visual information they can contain without getting cluttered and losing effect.”
Good design also closely ties in with card security. For example, CPI recently developed a four-color card for Visa with an intricate, 3D aspect area.
“It’s very distinctive and adds a unique identifier that enhances security because it’s hard to duplicate or counterfeit,” Dwyer says, adding that security features should be relatively overt. “Keep in mind that the last ‘head of security’ you have is the retail clerk who’ll be looking at the holograms or ultraviolet coatings and markings you’ve put on.”
The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 has also affected design—sometimes in surprising ways. “It used to be that cards would expire after two or three years,” says Falk. “Now, under the CARD Act, it’s five. But we changed our program to seven years. Because of that, we’ve been able to take advantage of provisions in the CARD Act that allow for certain disclosures to not have to be made on the front end of the card. This allows us to avoid what we see as a disruption of the actual card design.”
The Members Group used this opportunity to change its card design completely and introduce a design that’s new to the market: a vertically oriented card front (at left), as opposed to horizontal or landscape style.
“Consumers see the design as unique and different,” Falk says, “which inspires them to buy it. It makes for good show-and-tell afterwards.”
Next: Prepaid cards offer safe travels
Prepaid Cards Offer Safe Travels
When members ask for foreign currency or prepaid cards for international travel, do you send them to the bank down the street?
There’s no need to do that given the availability of Travelex Prepaid Cash Passport Cards. This is a turnkey program with minimal risks, reporting requirements, and costs to your credit union.
Cash Passport is a prepaid MasterCard-branded card issued in British pounds sterling, euros, or U.S. dollars, offering travelers a safer way to carry money. These cards are accepted at retailers displaying the MasterCard acceptance logo and at more than one million ATMs worldwide.
Members may reload their card 24 times at the credit union or by phone.
Travelex Foreign Currency Services helps build even stronger member relations through the addition of foreign-denominated bank notes and other foreign-denominated products.
Credit unions can use the popular Travelex CashPax™, a convenient, bill-sized packet of foreign currency in small denominations. The CashPax is available in euros, pounds, yen, Australian and Canadian dollars, and Mexican pesos.
Besides their convenience, travel cards provide security and value-added services. Travelex offers Global Emergency Assistance, where travelers can report and replace a lost or stolen card and get, among other things, emergency cash, assistance with medical and other emergencies, and lost passport assistance.
The cards, which holders can recharge remotely or at their credit unions, are becoming popular among parents who see them as ideal for their traveling children.
Travelex is a CUNA Strategic Services alliance provider.