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Mar 25, 2021

How Could Gift Cards Boost the Economy in Sectors Affected by the Crisis?

Whether they were given to you for a birthday, after winning a prize or given to you by your works council, you have already been in possession of a gift card.

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How Could Gift Cards Boost the Economy in Sectors Affected by the Crisis?

Whether they were given to you for a birthday, after winning a prize or given to you by your works council, you have already been in possession of a gift card.

They can be physical or dematerialised. They can be used to buy specific products in certain departments or they can give us the freedom to buy whatever we want. Above all they can help companies affected by the health crisis and boost the economy in certain sectors. This is what we will see together in this article.

Health crisis, economic crisis

Since 2020, the whole world has been experiencing regular lockdowns and curfews leading to the closure of restaurants, cinemas and other cultural places.

These measures to protect the population and contain the spread of covid-19 and its variants are forcing businesses to adapt to try to survive the situation. Some restaurants have switched to take-out, home delivery or listed themselves on home delivery services.

But even with these solutions, may go out of business and closed.

In France and other countries, sectors such as culture are even more affected. Cinemas, theatres, museums and amusement parks have not been able to accommodate the public for several months now. Despite the aid put in place by governments, the wait is becoming long.

According to Gira conseil, the loss of revenues in 2020 is estimated at 30 billion euros for the commercial and hotel catering sector.

The potential implementation of solutions such as a health pass to allow the reopening of restaurants and cultural venues may mean that we have reached the end of the tunnel. Yet, it will not be enough to quickly and effectively revive the economy of these hard-hit sectors.

Today, one of the solutions for injecting money quickly and efficiently into these economies already exists: prepaid cards.

Prepaid Cards

There are several types of prepaid cards :

  • Single-brand cards, which are specific to a single brand such as those used in the retail sector.
  • Multi-brand cards, which group together a large number of brands from different sectors.

They can be used online or at a point of sale, and offer great freedom and buying power.

For the Christmas Holidays in 2020, the French government announced that the tax exemption limit would be doubled from €171 to €342. This measure, which has allowed many companies to distribute more gift cards to their employees than normal, is aimed at supporting local shops.

34% of employees in France receive multi-brand gift vouchers, representing a total of €1.2 billion

Also, according to 2018 figures from A3C, the professional association of gift voucher issuers, 34% of employees in France received multi-brand gift vouchers, representing a total of €1.2 billion. This data shows that gift cards have a significant impact and can help inject money into the economy.

Another news item: in July 2020, in order to thank the health personnel for their involvement during the health crisis, the Somme departmental council and banking partners decided to offer them gift cards. In total, 13,000 gift cards worth €80 were distributed, representing over €1 million.

These cards, which can be used in independent restaurants, places of interest and cultural venues in the Somme department, have helped to support the region’s economy.

We can also add some figures showing the efficiency and relevance benefits of this solution for a retailer.

Indeed, gift cards increase customers’ average basket by 25%, is a fantastic way to acquire new customers and retain them (80% of gift card users are new customers), and is adapted for launching quality communication campaigns.

There are many advantages for consumers and retailers who offer this payment method. For consumers, it is the purchasing power that is given to them and the freedom to spend in many different stores. They can access their balance easily from the website and find out about all the partner stores. On their side, retailers have access to a SaaS platform for order entry and management.

These are tools and services that Market Pay provides to its customers to enable them to monitor and improve their performance.

At Market Pay, we develop these solutions in order to continually provide the best offer and to accompany our clients in the development of their business.

Today, we are able to offer single or multi-brand cards, notably with the Everywish service. In this service, we have more than thirty brands from different sectors. So if you are interested, don’t hesitate to contact us and we will be happy to assist you in setting up this solution

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