Pay before you shop
Published: 11 April, 2006
Both the Trafford Centre and the Bullring recently began offering shoppers the chance to buy pre-paid gift cards that allow the recipient to spend the value on the cards at retailers within the respective centres.
As with all such initiatives the objective of the cards is to help drive footfall and ultimately for this to increase retailers' sales. But just how effective is the strategy?
To answer this question, payments systems provider Smart Voucher recently took a trip to both shopping centres to undertake a detailed critique of how both cards stack up.
Although pre-paid cards are well established in the US, they are relatively new to the UK market. They work on a similar basis to paper gift vouchers, but in an electronic format, whereby shoppers purchase them from the centre and pre-load them with an amount of cash. They can be used throughout a centre to pay for goods and services from various retailers and restaurants.
According to Scott Thomson, chairman of Smart Voucher, the main reason the centres will have selected these two particular cards is because they are backed by major payment card companies MasterCard and Visa. The Bullring card is accepted by all retailers currently taking MasterCard Maestro payment cards and the Trafford Centre card is accepted by all merchants that presently take payments from Visa Electron cards.
This ensured quick implementation because they piggy-back on the card payment infrastructures already used by retailers. Although this means retailers do not need to change their till systems it does have the downside of the cards not being accepted by all retailers. Maestro and Electron sub-brand cards are not accepted by as many merchants as their parent MasterCard and Visa credit cards.
Among retailers that do not accept the Bullring card are: Clintons Cards, Pizza Hut and Mexx. And at the Trafford Centre they include: Holland & Barrett, Molton Brown, Footlocker and Bay Trading.
Thomson suggests the cards will probably have been marketed to the centres as proprietary cards - only to be used within a specific centre.
Marketing of the cards within the centres was very limited with no leaflet or poster campaigns. And many of the sales staff within the retailers had no knowledge of the cards.
Thomson believes this is either as a result of a low-key approach to providing the cards at this early stage or that the centres are hesitant of the benefits the cards provide. He says that before such cards become widespread in the UK, centre owners, retailers and customers must be aware of any problems. "Shopping centre owners must be careful and understand fully what they are getting into if they are considering introducing gift cards to ensure that they are not sold a pup," warns Thomson.
=== The Trafford Centre Gift Card ===
l Card purchase incurs no charge.
l Each card has an expiry date approximately 12 months from purchase. This is unusual when compared with paper gift vouchers' unlimited life.
l Card balances can be checked via a touchscreen, by phone, or on a website.
l Card balance checks by retailers are not possible.
l If the card is lost or stolen then it is not possible to have it cancelled.
=== The Bullring Gift Card ===
l A £2 purchase charge.
l There is also a £2.50 monthly administration charge, waived for the first six months of the card's life.
l Card balances can be checked by phone, via the card's website, through a touchscreen at the balance enquiry stand and at the centre's customer service desk.
l If the card is stolen or lost there is a replacement fee of £5.95.