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Retailers – Want To Add A New Revenue Stream?

April 25, 2011 by Dave Cook · Leave a Comment
Filed under: Consumer Loaded Programs, Consumer Promotions, Prepaid Resources, Uncategorized 

Are you looking for new revenue streams?  Are you currently selling prepaid cards?  You should be.

According to the 2010 Federal Reserve Payments Study recently updated on April 5, 2011, the fastest growing sector is Prepaid Cards with an annual growth rate in transactions of 21.5% from 2006 to 2009. The sheer number of transactions alone is staggering:  6 Billion!!! That’s the exact number of ATM transactions that occurred over the same time frame.  Transactions on Prepaid Cards equaled cash transactions at ATM’s.  This is an amazing trend that you as a retailer can capitalize on. Your customers are already purchasing Prepaid Cards and using them so why not have them purchase from you and create a whole new revenue stream?  The upward trend of the acceptance and usage of these cards means a golden opportunity for companies with vision.  Let’s say you administer the gift card program for a major U.S. retailer and you want to add a new revenue stream and increase foot traffic to your stores.  Why not sell branded network prepaid cards in two different flavors:  A fixed value and a general purpose reloadable. Here’s a sample scenario:   Retail chain with 500 locations

  • Sell a $50.00, single-value, branded network prepaid card with an industry standard retail mark-up of $4.95.
  • Average 2 cards sold per location per day = 1000 cards sold per day
  • 1000 cards per day x 360 days = 360,000 cards sold per year.
  • 360,000 cards x $4.95 per card = $1.78M
  • 360,000 cards x $50.00 customer load per card = $18,000,000 in loads
  • Industry statistics show that up to 70% of branded network prepaid cards will be spent at the brand on the card.  Let’s take a very conservative estimate of 25% of loads coming back to you the retailer
  • $18,000,000 in loads x .25 = $4,500,000 back to your organization.
  • You could also factor in the sales lift associated with a typical prepaid card transaction and add even more revenue to the equation.

Sell a General  Purpose Reloadable card and also add revenue from the reload fees and lift from cardholders coming into your retail stores to reload the cards. If you want to capitalize on this upward trend and have another vehicle to have your brand in the marketplace, give me a call and I’ll be happy to walk you through in more detail.


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