A look at multi and double redemption voucher products and their future in the market
Our research shows that just over 27% of UK businesses employing more than 50 people have purchased some form of multi and double redemption voucher in the last five years. The estimated turnover from these agency owned voucher products is in excess of £130 million. However, this is now on the decline as prepaid cards and point banking products offer greater scope for participants and clients.
So why have these voucher products been so popular and what does the future hold? Firstly we must look at how choice has evolved in the reward and incentive industry. Before the internet, choice was a brochure, catalogue or call centre, all of which were costly. Multi redemption vouchers gave recipients retailer choice and were very simple for clients to order from service driven agencies. However the biggest drawback in the 70s and 80s was the same as it is today, the major retailers did not want to accept the vouchers.
Top end retailers such as John Lewis and M&S do not want to dilute their brand by being associated with multi redemption voucher products. Also, they do not want to lose their significant direct B2B, B2C and employee sales, sales that may disappear overnight by accepting such products. This absence of top retailers brought about double redemption products such as our Supervoucher and it’s competitors.
A Supervoucher is a unique code on a paper certificate or within an email, this code can be redeemed online or via post and provides options from many of the vouchers, cards or e-codes available in the UK retail and leisure industry. Our Supervoucher product is a double redemption voucher that continues to grow despite a significant increase in clients turning to prepaid cards.
This may seem like a contradiction but Supervoucher is the most recent double redemption product to hit the market. It owes it’s growth to providing clients with an optional online self service system and full redemption transparency. For the first time this offers clients the visibility on how the reward is being redeemed and shows the breakage (non redeemed vouchers) which is often ‘quietly’ absorbed by the agency.
That brings us to the future of this market. With multi redemption vouchers such as Bonusbonds and High Street Gift Vouchers all now offering closed loop card alternatives it would seem that paper vouchers may not survive much longer.
There is also a question of whether closed loop cards themselves will survive when a client can use an open loop card for exactly the same price. Closed loop cards can work for salary sacrifice or employee benefit sectors where retailer discounts are passed on to the individual. However this sector also demands discounts from the top end retailers and not the mediocre.
There are surely going to be dominant open loop award cards with tens of millions in stored value, the natural progression for the agencies owning these cards will be to allow selected retailers to offer % discounts to cardholders. So are closed loop cards and their paper equivalent becoming irrelevant products and what about our very own Supervoucher?
We believe the use of codes to deliver a value, be it £s, $s, €s or points is a growing market. Supervoucher is evolving to also become a client solution, rather than just a straight voucher product. Programmes with more than one award per annum are choosing open loop award cards or point banking solutions with full merchandise catalogues. This means Supervoucher is appealing to clients looking for one off recognition, long service awards or Christmas gifts. As well as in sectors where there is a high turnover of staff or limited internet usage.
For more information on Supervoucher, please contact us on 0161 438 6010
