4 Simple Ways To Reap The Rewards Of Stored-Value Accounts In A Micro Market

September 10, 2015

Consumers in the U.S. rely heavily on cash, credit and debit cards to make payments. According to new research released by Blackhawk Network, however, alternative payment methods such as mobile payments and gift cards are also increasing in popularity. In the retail space of micro markets, one such payment method is both popular and beneficial: stored-value accounts.

4 Simple Ways To Reap The Rewards Of Stored-Value Accounts In A Micro Market

Stored-value accounts in micro markets allow users to load cash or money from a credit or debit card into their individual account to be used for future purchases. Consumers who load money into their stored-value, or pre-paid, account have the opportunity to receive perks such as loyalty benefits.

And in most cases, stored-value accounts allow the micro market operator to receive the user’s money upfront, which in turn gives the operator more capital to invest in other micro markets. They also allow the operator to track users’ buying habits to tailor future loyalty offers.

Despite the benefits of stored-value accounts, many operators still see a strong use of credit and debit cards for product purchases at the point of sale in micro markets. One micro market provider revealed that around 49 percent of consumers pay with credit or debit while another 49 percent pay with stored-value accounts and 2 percent pay with cash. In order to increase stored-value account usage, operators need to give consumers incentives to choose pre-pay.

One: Tie promotions to pre-pay accounts

Operators can increase stored-value account usage by tying rewards to those accounts. To get consumers on the pre-pay bandwagon, operators need to be offering some type of promotion that requires the pre-paid cards. At the point-of-sale, operators can run a “Buy 4 Get The 5th Free” promotion where the product purchase is tied to an account in order for the customer to receive the “Free Item”. This gives consumers a reason to use their stored-value account.

Two: Offer bonus funds, bonus credit

Some micro market providers also recommend offering bonus funds, or bonus credit, to consumers. Terri Starnes-Bryant, president of Microtronic US, suggests offering bonus funds to customers who spend a certain amount of money. “Spend $100 and get $10 added to your account, for example,” she said.

Operators can also give bonus credit to consumers when they add money into their accounts. For example, when a consumer pre-loads $80, the operator can give a bonus credit of $5. In this instance, money is given because the consumer loaded a certain amount of money rather than spent it.

Three: Provide a discount

For those consumers who aren’t interested in participating in promotions, a third incentive operators can try is offering a discount on stored-value account purchases. For example, users can receive a 5 percent discount on their entire purchase when they pay from their account. “Employing the optimal price/discount structure between credit cards and pre-paid cards will drive consumers to use their pre-paid cards,” said Jim Mitchell, president of Company Kitchen. Most micro market software should have the ability to offer a discount to a consumer that uses his or her stored-value card.

Four: Educate and advertise

The most important step for operators, however, is getting the consumer educated about the stored-value accounts. “It is really about selling the benefits of the card to the consumer,” said Elyssa Allahyar-Steiner, vice president of sales and marketing at Avanti Markets.

The key is constantly advertising the benefits with simple advertisements through digital signage or other methods such as copy on shelf-talkers and clings within close proximity of the product. “Oftentimes, it’s a matter of conditioning the consumer to make a habit out of using the pre-paid card,” said Mitchell of Company Kitchen.

“At the end of the day we want to allow the consumer to pay whichever way they want, but we also want to creatively execute ways to constantly engage the consumer to take advantage of loyalty programs through the market card,” concluded Allahyar-Steiner of Avanti Markets.

Consumer preferences for the way they pay will continue to change, but by offering incentives, operators can make pre-pay the preferred consumer choice in micro markets.