Feature: Paper, e-vouchers and plastic – Sibling rivalry or complementary partners?

With chip and pin technology now fully operational and the introduction of gift card malls offering a selection of suppliers’ cards in one place, it may seem that the time is now ripe for the voucher and gift card industry to embrace this transition fully. However, the debate remains open as to whether there is still a place on the market for paper vouchers and whether the relationship between all three is one of ‘sibling rivalry’ or of ‘complementary partners’?

“I believe there is still life in paper”, says Julie Rosehill, sales director for The Voucher Shop and new member of the Va. “People like the touch and feel of paper currency and the recipient knows exactly how much credit they have to spend.”

Dan Mountain, joint managing director of online gift retailer Buyagift.com says that, following last year's record-breaking Christmas, he can see little evidence that the public are losing their appetite for paper vouchers: “I think it would be a mistake to talk in terms of one format replacing the other. Plastic may suit retailers, but it's not necessarily what the public wants. I think most industry players will adopt a portfolio approach and market a mixture of paper, plastic and e-vouchers.”

Should we expect the consumer to maintain a level of affection for the classic paper voucher? After all, the idea of bank notes being completely overhauled by credit cards is practically inconceivable and many feel the same about the traditional paper voucher. Paper gives the end user the impression that they are dealing with ‘free money’, which has an added value that simply cannot be achieved with electronic gift cards or e-vouchers.

Jackie Barker, product manager at Grass Roots, agrees that there is still a place for paper vouchers, but emphasises that this place is firmly alongside e-vouchers and gift cards: “The quick answer is ‘yes’. Each provides a different solution for a different promotion. The art is in selecting the right mechanic for the right promotion and the right audience.”

eXhilaration, a subsidiary of lastminute.com, has enjoyed success in the e-voucher market in recent years, offering experiential vouchers for a variety of online reward schemes that reach out to a new generation of thrill seekers. “Paper vouchers simply wouldn’t be in keeping with a modern, vibrant brand that is a product of the dot-com boom” says Tim Bishop, managing director for eXhilaration. “On the other hand, attempting to reach out to the grey market via a website promotion offering ‘money off’ their favourite restaurant would probably not work either.”

Motivation agencies will benefit from being able to offer a variety of mechanisms that cater for a wide audience argues John Sylvester, executive director at p&mm and new member of the Va: “A combination of all mechanisms offers the full complement of reward/incentive options to suit a variety of situations and is the most effective way of fulfilling a client’s business objectives. Defining the objective of each incentive is key to deciding which incentive mechanism will work best.”

Tracy Aslam, head of incentive business at Kingfisher Gift Vouchers says: “Your sales promotion strategy should inspire the audience and, in many cases, this means offering choice. A single solution cannot fit the needs of everybody or every situation so variety is key when seeking comprehensive reward and recognition solutions.”

Alexandre Meerson, incentive and motivation director at Sodexho, highlights that it is important to understand the nature of sales promotion first: “Is it a focused campaign or a long-term programme? Is it a tactical approach or a strategic plan?” he asks.

With this in mind, a distinction must be made between the consumer and B2B voucher market. B2B vouchers are often required for staff rewards, recognition and bonuses, and a more immediate, short-term solution that has a guaranteed impact will be most effective.

Consumers are now heavily biased towards plastic because of the convenience factor they offer. These habits require long-term schemes, including online points and store cards, which encourage repeat transactions and increase brand loyalty.

Peter Hesketh, business development manager at Nitecrest, warns that retailers should not rush headlong into new procedures without considering all possible repercussions: “Integration with new transaction processing partners, the re-education of staff and new distribution channels must all be established prior to the launch of a new gift system.”

These are important issues that must be addressed before electronic and plastic schemes can truly take hold of the market. Improved technology always leads the way and it is only right that the consumer should benefit from more efficient reward schemes. This being said, there is no real danger that we will witness the demise of the paper voucher at any time soon. Recipients still value its merits and it has an important role to play in the corporate voucher market. I really believe that paper, plastic and e-vouchers will continue to have a place in the sales promotion mix.