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Q&A with Rebekka Rea, RGCA (Fall 2011) - Paybefore

Innovative Prepaid Solutions, LLC
Innovative Prepaid Solutions, LLC

The Retail Gift Card Association (RGCA) formed in 2008 to promote understanding and use of closed-loop gift cards and establish best practices. It now has 50 members. RGCA's executive director Rebekka Rea discusses the association's work opposing potentially harmful legislation. Fraud is a top concern for members, and RGCA aims to research the actual size of the closed-loop gift card industry and help members grow sales. Mobile gift cards and e-gifting are seen as important future areas, but physical cards remain strong through major retailers' creative displays and promotions.

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Home 損 Infrastructure Value Chain 損 Q&A with Rebekka Rea, RGCA (Fall 2011) 12.05.11 Q&A with Rebekka Rea, RGCA (Fall 2011) Fall2011 The Retail Gift Card Association (RGCA) formed at the end of 2008 to promote the understanding and use of closed-loop gift cards and to establish best practices that bene鍖t industry and consumers. Although its start coincided with the recession and some of the lowest gift card holiday sales in recent memory, the past three years have proved productive, with the association reaching 50 members. Its also been busy as the nonpro鍖t seeks to expand its member resources for lobbying against potentially crippling legislation and investing in research to inform strategies and growth. Paybefore sat down with RGCAs executive director Rebekka Rea to check in on the associations progress and what its members are focusing on for the future. Paybefore: Whats been keeping you busiest this year? Legislation like we saw in New Jersey last year? Rebekka Rea: Weve had a little bit of a reprieve since the arguments in the New Jersey case are being heard. Were supporting the parties involved [New Jersey Retail Merchants Association, New Jersey Food Council and American Express Prepaid Card Management Corp]. We want them to 鍖ght to completely repeal this law. Oregon had a bill that wanted to make every retail gift card reloadable. Thankfully, it didnt pass, but it demonstrates that theres still a lack of understanding at least at the state level. So, were keeping tabs on all the di鍖erent legislation. We created a government relations coalition within the RGCA, which now provides our membership with a government relations representative to work on their behalf. In addition, were working even more closely together in identifying some best practices for terms and conditions. One of our goals is to continue our association outreach to those with common interests like the National Restaurant Association, the Incentive Gift Card Council (IGCC) as well as some of the state associations. We want to strengthen awareness on the state level and be a resource to others. Paybefore: In addition to changing laws, what are your members concerned about? RR: Fraud is de鍖nitely at the top of the list. There are several di鍖erent scams going on. One involves fraudulent checks and bogus companies ordering large quantities of gift cards. The check doesnt go through, but the cards have already been sent. Even though most retailers can deactivate loads on the cards once this is discovered, some get through and are used. The Secret Service has gotten involved and formed a task force around this particular scam. It has a鍖ected many national retailers. Paybefore: What is a key priority for you in the next year? RR: We want to be a well-rounded group thats focused on the government and lobbying side as well as on commissioning research thats going to help members grow their programs. We are working hard to 鍖ll the knowledge gap. Theres not a true number of how big the closed-loop industry is. There are a lot of guestimates and aggregates of information from processors or retailers, but some retailers issue gift cards for store credit. Do those really count as gift card sales? So, were working with Mercator Advisory Group and the IGCC to develop some research that will identify the actual size of our industry and help formulate better plans on how to grow within particular channels. Q&A with Rebekka Rea, RGCA (Fall 2011) -足 Paybefore h>p://paybefore.com/north-足america/qa-足with-足rebekka-足rea-足rgca-足fa... 1 of 2
RR: De鍖nitely the proliferation of mobile. E-gifting applications are probably the game changer. The jury is still out on the volume retailers are getting through that channel, but its in the early adoption stage. The key thing is making sure you have very sound, secure systems that your payments are going through. Paybefore: Whats most important for retailers to consider when they are looking at adopting mobile or e-gift technology? RR: Security is one thing, but also at the top has to be the ease of redemption. The whole end-to-end experience of that virtual gift card has to be as enjoyable as with a physical gift card. Paybefore: I heard that online sales of gift cards are less than 10 percent of gift card sales, although it can vary by retailer. Yet e- commerce grabs all the headlines. RR: Third-party continues to be a strong channel for gift card sales. The convenience factor lends itself to those planned and impulse purchases that you make at grocery and drug stores. Buying a physical gift card online doesnt lend itself to that convenience factor. However, many brands have added an e-gift card option to their Websites and their social media pages, which allows the instant gifting consumers demand. Some brands have added personalization features to their e-cards, such as the ability to upload photos and add an audio voice message, which enhance the personal gifting experience. These e-cards or v-cards (virtual gift cards) can be delivered to email addresses on computers or smartphones. Paybefore: Do you think e-gifting will be more popular on the consumer side or B2B side? RR: Both. I know as early as two years ago a lot of the incentive houses were looking for virtual applications for ful鍖llment. Its easy and e鍖cient. You can customize the virtual cards easily and send them out instantaneously. B2B has de鍖nitely tapped into the e-gifting channel and that will only get bigger. For example, in July, SVM acquired the company GiftZip.com, which serves as a gateway to retailers that o鍖er e-gift cards online. Expanding its portfolio of physical gift cards to include digital delivery allows SVM to be more nimble, a鍖ordable and productive to its clients. Consumers are getting more and more adapted to having the ability to send and receive gift cards on their phones. You dont see people without their phones. So its going to be a natural segue. Paybefore: Do virtual/mobile cards provide any other bene鍖ts? RR: Theyre a cost-e鍖ective way to add additional marketing components that target consumers who already like your brand, whether its encouraging them to sign up for your loyalty program or o鍖ering them a special discount for redeeming their card by a certain date. They give retailers another opportunity to collect data on consumer behavior, not just from the purchaser but the recipient as well. Paybefore: How are your members using social media? RR: Everyone I talk to says social media has a big part in exposure, but the jury is still out on driving revenueue. In terms of marketing and exposure, I feel sorry for any marketing person who doesnt have a social media background. The trick is to 鍖gure out how to monetize it. I found it interesting that Lady Gaga launched her CD on FarmVille. This is just one example of how the lines between the virtual and real worlds are getting blurred. All ages play these virtual games, so it makes sense to tap into that somehow. Paybefore: What are you most excited to see this holiday season? RR: Last year we saw 鍖at to a slight uptick for gift cards sales. All indications are that were going to continue to bounce back. Were counting on mobile apps and the virtual gift cards to lend some additional excitement, but for the most part our members are keeping their plans pretty close to the vest. RGCA is supporting a new campaign created by Gift Card Impressions called Gift Card Weekend. There will be a national push January 6-8 to encourage consumers to redeem the gift cards they received for the holiday. We typically dont endorse any particular vendors products, but in this scenario Gift Card Impressions has created a campaign that is good for consumers and good for our industry. We jumped on the opportunity to create some national buzz about gift card redemption. As for in-store buzz, the retail brands are looking for additional ways to make their cards stand out. Theyre paying more for third-party premium placement in displays and in locations throughout the store, such as at checkout. Well continue to see promotions such as buy a $50 card, get a $10 card for yourself. And, theres still a lot of creativity and innovation in terms of unique shapes for cards and their holders. The Home Depot has a gift card holder that resembles a paint can and another that looks like a level. Adding small touches like this really helps make the gift card more personal. Paybefore: Look into your crystal ball for us. Whats ahead for retail gift cards? RR: In a nutshell, mobile, mobile, mobile. Well see a lot of expansion and growth there. For the association, we have lots of initiatives planned. Q&A with Rebekka Rea, RGCA (Fall 2011) -足 Paybefore h>p://paybefore.com/north-足america/qa-足with-足rebekka-足rea-足rgca-足fa... 2 of 2 Were going to add to sta鍖 and will be getting more involved in the legislative aspects, continuing to educate public o鍖cials and consumers on the positive attributes of closed-loop gift cards.

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Q&A with Rebekka Rea, RGCA (Fall 2011) - Paybefore

  • 1. Home 損 Infrastructure Value Chain 損 Q&A with Rebekka Rea, RGCA (Fall 2011) 12.05.11 Q&A with Rebekka Rea, RGCA (Fall 2011) Fall2011 The Retail Gift Card Association (RGCA) formed at the end of 2008 to promote the understanding and use of closed-loop gift cards and to establish best practices that bene鍖t industry and consumers. Although its start coincided with the recession and some of the lowest gift card holiday sales in recent memory, the past three years have proved productive, with the association reaching 50 members. Its also been busy as the nonpro鍖t seeks to expand its member resources for lobbying against potentially crippling legislation and investing in research to inform strategies and growth. Paybefore sat down with RGCAs executive director Rebekka Rea to check in on the associations progress and what its members are focusing on for the future. Paybefore: Whats been keeping you busiest this year? Legislation like we saw in New Jersey last year? Rebekka Rea: Weve had a little bit of a reprieve since the arguments in the New Jersey case are being heard. Were supporting the parties involved [New Jersey Retail Merchants Association, New Jersey Food Council and American Express Prepaid Card Management Corp]. We want them to 鍖ght to completely repeal this law. Oregon had a bill that wanted to make every retail gift card reloadable. Thankfully, it didnt pass, but it demonstrates that theres still a lack of understanding at least at the state level. So, were keeping tabs on all the di鍖erent legislation. We created a government relations coalition within the RGCA, which now provides our membership with a government relations representative to work on their behalf. In addition, were working even more closely together in identifying some best practices for terms and conditions. One of our goals is to continue our association outreach to those with common interests like the National Restaurant Association, the Incentive Gift Card Council (IGCC) as well as some of the state associations. We want to strengthen awareness on the state level and be a resource to others. Paybefore: In addition to changing laws, what are your members concerned about? RR: Fraud is de鍖nitely at the top of the list. There are several di鍖erent scams going on. One involves fraudulent checks and bogus companies ordering large quantities of gift cards. The check doesnt go through, but the cards have already been sent. Even though most retailers can deactivate loads on the cards once this is discovered, some get through and are used. The Secret Service has gotten involved and formed a task force around this particular scam. It has a鍖ected many national retailers. Paybefore: What is a key priority for you in the next year? RR: We want to be a well-rounded group thats focused on the government and lobbying side as well as on commissioning research thats going to help members grow their programs. We are working hard to 鍖ll the knowledge gap. Theres not a true number of how big the closed-loop industry is. There are a lot of guestimates and aggregates of information from processors or retailers, but some retailers issue gift cards for store credit. Do those really count as gift card sales? So, were working with Mercator Advisory Group and the IGCC to develop some research that will identify the actual size of our industry and help formulate better plans on how to grow within particular channels. Q&A with Rebekka Rea, RGCA (Fall 2011) -足 Paybefore h>p://paybefore.com/north-足america/qa-足with-足rebekka-足rea-足rgca-足fa... 1 of 2
  • 2. RR: De鍖nitely the proliferation of mobile. E-gifting applications are probably the game changer. The jury is still out on the volume retailers are getting through that channel, but its in the early adoption stage. The key thing is making sure you have very sound, secure systems that your payments are going through. Paybefore: Whats most important for retailers to consider when they are looking at adopting mobile or e-gift technology? RR: Security is one thing, but also at the top has to be the ease of redemption. The whole end-to-end experience of that virtual gift card has to be as enjoyable as with a physical gift card. Paybefore: I heard that online sales of gift cards are less than 10 percent of gift card sales, although it can vary by retailer. Yet e- commerce grabs all the headlines. RR: Third-party continues to be a strong channel for gift card sales. The convenience factor lends itself to those planned and impulse purchases that you make at grocery and drug stores. Buying a physical gift card online doesnt lend itself to that convenience factor. However, many brands have added an e-gift card option to their Websites and their social media pages, which allows the instant gifting consumers demand. Some brands have added personalization features to their e-cards, such as the ability to upload photos and add an audio voice message, which enhance the personal gifting experience. These e-cards or v-cards (virtual gift cards) can be delivered to email addresses on computers or smartphones. Paybefore: Do you think e-gifting will be more popular on the consumer side or B2B side? RR: Both. I know as early as two years ago a lot of the incentive houses were looking for virtual applications for ful鍖llment. Its easy and e鍖cient. You can customize the virtual cards easily and send them out instantaneously. B2B has de鍖nitely tapped into the e-gifting channel and that will only get bigger. For example, in July, SVM acquired the company GiftZip.com, which serves as a gateway to retailers that o鍖er e-gift cards online. Expanding its portfolio of physical gift cards to include digital delivery allows SVM to be more nimble, a鍖ordable and productive to its clients. Consumers are getting more and more adapted to having the ability to send and receive gift cards on their phones. You dont see people without their phones. So its going to be a natural segue. Paybefore: Do virtual/mobile cards provide any other bene鍖ts? RR: Theyre a cost-e鍖ective way to add additional marketing components that target consumers who already like your brand, whether its encouraging them to sign up for your loyalty program or o鍖ering them a special discount for redeeming their card by a certain date. They give retailers another opportunity to collect data on consumer behavior, not just from the purchaser but the recipient as well. Paybefore: How are your members using social media? RR: Everyone I talk to says social media has a big part in exposure, but the jury is still out on driving revenueue. In terms of marketing and exposure, I feel sorry for any marketing person who doesnt have a social media background. The trick is to 鍖gure out how to monetize it. I found it interesting that Lady Gaga launched her CD on FarmVille. This is just one example of how the lines between the virtual and real worlds are getting blurred. All ages play these virtual games, so it makes sense to tap into that somehow. Paybefore: What are you most excited to see this holiday season? RR: Last year we saw 鍖at to a slight uptick for gift cards sales. All indications are that were going to continue to bounce back. Were counting on mobile apps and the virtual gift cards to lend some additional excitement, but for the most part our members are keeping their plans pretty close to the vest. RGCA is supporting a new campaign created by Gift Card Impressions called Gift Card Weekend. There will be a national push January 6-8 to encourage consumers to redeem the gift cards they received for the holiday. We typically dont endorse any particular vendors products, but in this scenario Gift Card Impressions has created a campaign that is good for consumers and good for our industry. We jumped on the opportunity to create some national buzz about gift card redemption. As for in-store buzz, the retail brands are looking for additional ways to make their cards stand out. Theyre paying more for third-party premium placement in displays and in locations throughout the store, such as at checkout. Well continue to see promotions such as buy a $50 card, get a $10 card for yourself. And, theres still a lot of creativity and innovation in terms of unique shapes for cards and their holders. The Home Depot has a gift card holder that resembles a paint can and another that looks like a level. Adding small touches like this really helps make the gift card more personal. Paybefore: Look into your crystal ball for us. Whats ahead for retail gift cards? RR: In a nutshell, mobile, mobile, mobile. Well see a lot of expansion and growth there. For the association, we have lots of initiatives planned. Q&A with Rebekka Rea, RGCA (Fall 2011) -足 Paybefore h>p://paybefore.com/north-足america/qa-足with-足rebekka-足rea-足rgca-足fa... 2 of 2 Were going to add to sta鍖 and will be getting more involved in the legislative aspects, continuing to educate public o鍖cials and consumers on the positive attributes of closed-loop gift cards.