20
FEATURE: MALL INCOME GENERATION
Marketing
MAGIC
Gift cards are about much more than commercialisation:
their real value lies in the consumer data they capture
T
he gift card industry has seen radical changes over the customers’ postcodes. And added to that they could track what
past decade. Initially seen as a commercialisation initiative, those individual customers bought and when.
it now comes firmly within the marketing manager’s “For the first time we were able to capture card spend data,”
remit, according to Sue Boor, PruPIM’s head of shopping centre remembers Boor. “No longer were we relying on theoretical
marketing. catchment maps or customer surveys – we now had real data to
Boor started working with market leader Flex-e-Vouchers eight work on.”
years ago, initially with a gift cheque scheme at the Mall at Cribbs And over time that has changed the way mall owners see their
Causeway. “Vouchers had been run by retailers for years,” she says, card operations: no longer are they simply an income stream but
“and to do it properly you have to think like a retailer.” their real value lies in how they inform a centre’s marketing.
But Andrew Sims, sales and marketing director at Flex-e- Initially, to reflect the fact that malls cannot absorb the costs
Vouchers points out that there’s a key financial difference. “A retailer of running a card system, owners were forced to impose a service
hands over goods in return for its vouchers, charge of £2 or £3. This met a degree of
so they’re effectively cash. But a shopping consumer resistance from shoppers who
centre is merely the middle man taking resented paying for something that was
cash from consumers and handing it to the previously free of charge.
retailers. That means managing the cost of But by 2007 Capital & Regional became
the operation is much more important.” the first UK operator decided that the
By 2004 the gift cheque operation had marketing benefits were sufficient to
expanded to include a Christmas Club and justify selling cards with no surcharge. “That
savings schemes but increasingly retailers forced us to reassess the business model
were giving up taking cheques which would to see if it could work free of charge,” says
have limited the freedom of choice which Sims. “The solution was to rely on what the
makes mall-wide vouchers so attractive to industry calls ‘breakage’ to cover the costs
consumers. of operation.” Basically cards have an expiry date of 12 months from
“Card payments were the only way to go,” notes Sims. “And the the date of issue, and any unspent funds then revert to the issuer.
US experience was that card-based gifting programs worked for “Mall owners are now able to identify funds that haven’t been
both closed-loop (retailer) and open-loop (mall) systems.” And after a spent by the expiry dates and draw them down,” Sims explains. “As
lot of research the company opted for the Mastercard system. soon as we proved that worked there was a wholesale migration in
However there were certain regulatory hurdles to overcome the market to free-of-charge cards.”
which meant that new partners had to be brought in. Newcastle Manchester Arndale became the first mall to go card-only and
Building Society, which is registered by the FSA as an ‘electronic that coincided with a fundamental rebranding exercise. “We had to
money operator’ holds the funds in segregated and managed treat it in a totally different way,” explains Boor. And others quickly
accounts. And Nomad maintains the books as a ‘third party followed, to the extent that only two out of the 66 malls in the Flex-
processor.’ e-Vouchers network still use paper vouchers.
Equally, the terms and conditions attached to vouchers needed For PruPIM’s Boor there’s no going back. “It’s now part of the
to be revised and, under the ‘know your customer’ regime used armoury. We know who our customers are,” she concludes.
to restrict money laundering, malls had to capture the name and
address of every customer buying a gift card. Find out more:
This meant customers had to come into the centre to buy For more information, please contact the author or visit the website:
their card which was good for footfall. But the real benefit for

www.shopping-centre.co.uk/mall_income_generation
mall operators was that for the first time they could capture their

graham.parker@jldmedia.com
SHOPPING CENTRE November 2009 www.shopping-centre.co.uk
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44