The Truth Behind Gift Card Incentive Offers

As a leading provider of survey mailing services, we see just about every kind of incentive offer out there. These days, it seems everyone is on the Gift Card bandwagon. And for good reason. They work! But all Gift Cards are not the same. In fact, you may be surprised to learn that most of the gift cards you’ll find are not gift cards at all.

A gift card, by definition, is a prepaid stored-value money card issued by a retailer or bank, redeemable only for purchases within particular stores or businesses that take the branded card and cannot be cashed out. They typically never expire.

Interestingly enough, most survey research services do not use them. Instead, you are more likely to see Closed Loop Gift Cards or Prepaid Rewards Cards. Rewards Cards do expire. And here’s the twist. Somebody pockets the unused balance. After reading this blog, it may be you.

Here are the main differences between the 3 most common types of Incentive Gift Cards.

Gift Card

Closed Loop Gift Card

Closed loop is a payments industry term for a gift or credit card that can only be used in a single store or group of stores (e.g, Amazon, Starbucks, Darden Restaurants). Closed loop cards rarely have purchase or dormancy fees, which is a big plus. Some vendors allow co-branding for an additional fee and/or no cost for high volume orders. These types of cards are useful when your survey population is similar.

Prepaid Rewards Card

These cards look and act just like a Visa or Mastercard credit card. The difference is they will expire anywhere between 90 days to 12 months after activation. The longer they are active, the bigger the processing fee. The processing fees are less than Gift cards because the vendor will keep the unused funds after the card’s expiration. But take note. Some vendors will split the unused funds with you after the cards expire on high value/volume programs. If you are buying these cards in bulk, make sure you ask about this. Prepaid Rewards Cards are attractive to respondents because they can be used anywhere. They are useful when your survey population is varied and you need a one-size fits all approach. Just make sure to communicate the card and expiration rules to your respondents. Most importantly, do not refer to it as a gift card, as you will then be subject to the laws that govern them. Instead, refer to them as Prepaid or Rewards Cards.

Gift Card

Alas, the actual, straight-up Gift Card. These also look and act just like a Visa or Mastercard Credit card. And while they typically show an expiration date of 12 to 60 months (required for online purchases), they will be replaced at no cost with a new expiration and the balance left intact. Gift cards do have a higher activation fee, which is how banks make their money for producing the card and maintaining the account until the funds are used. But they hold an advantage over the other formats, as they can be used anywhere and typically don’t expire.

Here is a list of common fees for Gift Cards.:

Fee Type Amount Charged
Activation Fee $5.95 per card
Inactivity Fee* $5 per month
Lost/Stolen Card Reissue Fee $10 per occurrence
Standard Delivery $25 per order
Express Delivery $35 per order

*Assessed each month after 12 consecutive months of inactivity, after the Card Activation Date or anytime thereafter.

Unlike other mail survey companies, DataForce has a relationship with the banks, so we are able to provide regular Gift Cards in bulk that don’t expire, as well as Closed Loop and Prepaid Rewards Cards. Learn more>

Final Thoughts

    • All 3 types of Incentive Gift Cards are useful. The one you choose will largely depend on your target audience and your budget.
    • If you plan to use Rewards Gift Cards, make sure to ask for the opportunity to split the funds from unused balances.
    • Do not refer to Rewards Cards as Gift Cards or you will be subject to the laws that govern them.

If you’d like more information on gift card incentives, incentive fulfillment or mail surveys in general, contact us today.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Quote Get Quote