Wednesday, April 9, 2014
Aite describes merchant 'mania' for gift cards
Boston-based payments consultancy Aite Group LLC conducted research to discover what strategies merchants are pursuing in regard to the panoply of available prepaid card schemes and solutions. Aite found that by far the most popular prepaid card offer continues to be retailer-specific, closed-loop gift card.
In Prepaid Mania: A Merchant Affair, Aite said 89 percent of merchants surveyed now offer closed-loop gift cards, followed by 74 percent who offer open-loop, general-purpose reloadable (GPR) cards, and an equal number who sell their own branded gift cards. Open-loop, network-branded gift cards were also popular, at 71 percent of reailers.
Aite Senior Analyst and report author Madeline Aufseeser also found that the least popular offering, by a far margin, was a merchant's own branded open-loop gift card product; seventy-four percent of merchant respondents said they had absolutely no plans to offer such a product.
Meanwhile, GPR cards were cited by retailers as the category they were most likely to add, with 11 percent of merchants saying they plan to add the card offering in 2014 or 2015, followed by third-party open-loop cards, at 9 percent.
The report was based on research Aite conducted in the fourth quarter of 2013 in conjunction with gift card distributor InComm.
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