Prepaid Incentive Card pending Affected By Economy

Consumer spend on prepaid incentive cards is moving toward low-cost, everyday items due to the economy, according to a joint analysis conducted by Berkeley Payment Solutions and Scotiabank. The New York City-based prepaid card provider, which specializes in incentive and reward programs, and the Toronto-based issuing bank examined North American consumer spending on Visa prepaid products in Berkeley programs from Q1 2008 to Q1 2009 and found spending at fast food restaurants increased 107 percent. The analysis also found that consumers are putting off big purchases, as spending at home furnishing and equipment stores is down by 44 percent. Reward recipients are using their prepaid cards more often at discount stores (up 37 percent), drug stores and pharmacies (up 26 percent) and grocery stores (up 20 percent). David Eason, president of Berkeley Payment Solutions, said: “As economic conditions worsen, spending migrates towards day-to-day necessities, such as groceries or clothes, instead of non-essential items such as luxury vacations or big screen televisions.” Eason also said companies are moving away from travel and merchandise toward network branded prepaid cards as rewards for employees, customers and partners “to avoid the perception of extravagance and to allow individuals to choose the rewards that are most appropriate to their current needs.”

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