Friday, May 28, 2010

Summation of Challenges for adhering to CARD act

US Banker takes a good cross-industry look at the fallout of the CARD act on gift cards


But implementing the required changes will be a challenge, and many worry the short time frame for doing so could hurt sales just as the busy holiday season starts to get underway.

"The industry was hoping they could keep the old plastic on the shelf until January because of the holiday season coming up," says Judith Rinearson, a partner at law firm Bryan Cave, who represents the Network Branded Prepaid Card Association and Retail Gift Card Association. Instead, "everyone is scrambling," she says.

Prepaid players such as American Express and Green Dot Corp. prepped for the regulations by dropping fees, adding disclosures or making changes to the expiration dates on their gift cards. Still, many in the industry are worried about upfront costs that issuers are likely to pass on to consumers—which ultimately could dampen sales.


They also anticipate a possible shortage of prepaid cards for sale to consumers, because issuers are going to have to replace cards sitting on retailers' shelves that won't pass the Fed's muster after August.

John Barbella, senior vice president of the payment solutions group at the $2 billion-asset Bancorp Bank in Wilmington, Del., says the main challenge for prepaid issuers like his company is coordinating with all touch points in the gift-card loop—distributors, card associations and retailers—to account for the whereabouts of the stock that needs to be replaced.


Rinearson says manufacturers are having trouble including all the necessary disclosures of terms and conditions on the cards. "The rewards cards have to have the words 'promotional rewards card' on the front—it can't be a sticker," she says. And if a card expires in less than seven years, then there also has to be a disclosure on the card's face explaining that the "card expires, but the funds do not," says Rinearson.

Prepaid Expo
falls in early March next year, so it should be a good time to take a look at the first wave of fallout of the August implementation.

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Wednesday, May 19, 2010

Prepaid Expo Europe 2010: a truly international and interactive event

The dust has settled on Prepaid Expo Europe, and we want to thank all of the Sponsors, Speakers and attendees from over 19 countries that helped make our first Europe-based event a great success.

Our much lauded conference Chairs Matthew Lanford of MasterCard and Brian Dunne of Action Solutions guided our 3 days of sessions with passion and enthusiasm, which created interactive sessions addressing the pressing issues facing myriad European prepaid issues

Keynote Speaker Hamish Taylor kicked off the event by sharing his experiences at the helm of Eurostar, Sainsbury Bank, British Airways, to name a couple His imaginative, innovative ways of solving business problems by plucking ideas from outside the industry to solve business problems by identifying customer benefits. These themes of innovation and listening to the customer carried throughout the event, with our speakers referencing how these very ideas should be applied to the prepaid industry.

Among the session highlights: Anthony Olsen of Paypal Europe, Thaer Sabri of Electronic Money Association and Siobhan Moore of Salans took us through the regulatory minefield of doing prepaid business throughout Europe, answering dozens of questions from the crowd. Iwan Mathys talked about the details of his wildly growing prepaid business at Swiss Post with his distribution guru Christian Lindner from Retailo. Tony Craddock of Global Prepaid Exchange hosted a conversation about contrarian views on loyalty and incentives with Mark de Quervain of Vue Entertainment, Niki Akhurst of Smartbox and Kevin Turnbull from Spafinder. Steve Shutts talked through how he and the Norton Group solved Animal's prepaid programme requirements. And the case studies and panel discussions

In addition to the impromptu networking taking part throughout the Conrad Brussels, attendees, speakers and sponsors all gathered for Prepaid Expo's receptions, the highlight of which was MasterCard's Diamond Cocktail Reception. All attendees received a glass of champagne with a stone in the bottom… but only one lucky delegate from Brazil walked away with a real .75 carat diamond valued at 2,700 Euro!

(Right: Attendees gather around the Prepaid Expo jeweler to see if their stone is the real deal! Below: Matthew Lanford of MasterCard presents diamond to winner)

In all, it was a great launch of the Prepaid Expo event into Europe. Have ideas and suggestions about next year's event? Email me!

ATTENDEES: Look for your e-survey in your inbox. Fill out the evaluation for chance to win a free pass to a future Prepaid Expo (surveys must be completed by May 26)

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Monday, May 10, 2010

Prepaid cards versus rebate cards

In a recent article at Fox Business, they look at the difference between prepaid cards and rebate cards given out to replace rebate checks. Rebate cards are not currently protected by the Credit CARD Act of 2009. Many consumers confuse rebate and gift cards, as they do look similar. But they aren't because a rebate represents free money to a consumer, rather than money that has been placed on a card by a consumer to make purchases. The best way for consumers to avoid fees and expiration on rebate cards is for them to use them.

What do you think? Should rebate cards and prepaid cards be held to the same standards? Or is there a clear distinction between the two? While the money loaded onto a rebate card isn't the consumers, do they still have a right to always have access to that money?

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