Welcome. Natasha Toothill VA Chair Chair’s News Round.
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Transcript of Welcome. Natasha Toothill VA Chair Chair’s News Round.
Welcome
Natasha Toothill
VA Chair
Chair’s News Round
Retail Week
Park Group lifted as cautious shoppers save for Christmas
Asda Business Rewards launch on line system to allow top up of Asda gift cards
VRL KnowledgeBank- new research
76% aware of gift cards 60% purchased gift card in the last 12 months 50% said they would reload their prepaid card 50% use prepaid cards for internet purchases Other uses include budgeting, money transfer,
parents buying teen cards
Compiled online by British Market Research Bureau
Paybefore
California Mall Abandons Plastic Gift Cards for Paper
VA members 3V and G-T-P named in The Paybefore ‘Top Companies To Watch’
Sharper Image bankruptcy – Ramifications for the Gift Card industry
Retail Gift Card Alliance (VA USA)
This holiday, gift cards may go towards gas, food (Reuters/Archstone consulting USA)
Grass Roots strengthens US division (Sales Promotion magazine)
House of Fraser vouchers now redeemable on line (Sales
Promotion magazine)
Theatre Tokens join Leisure Vouchers (Sales Promotion magazine)
Sainsbury launches gift card and gains additional press with the marketing initiative ‘Meal Ticket’
Coinstar announces partnership with UK first on line gift card centre www.thegiftcardcentre.co.uk
Serious interactive gift cards sign licence agreement for UK and Europe with 4logic media
Promotions & Incentives magazine
Employee Motivation Survey
Annually every June 200 employees
questioned
How long until you spend your voucher or gift card?
0% 10% 20% 30% 40% 50% 60%
Big Treat
Hardly Ever
Eventually
Immediately
2008
2007
Source: Promotions & Incentives
When you spend, do you add your money?
Source: Promotions & Incentives
What type of vouchers do you give?
0% 20% 40% 60% 80%
Retail Store
Experinces
Other
2008
2007
Source: Promotions & Incentives
Paper or Plastic?
Source: Promotions & Incentives
Payment Services Directive
Meeting held with UK government Treasury department, attended by: Robert Courtneidge – Salans Arun Glendinning – B&Q Ray Brash – PPT Tessa Kelly – British Retail Consortium Graham Sellers – Asda Business/Jordan Media Andrew Johnson - VA
Results of Meeting
Payment Services Directive starts November 2009 Big issue for VA is definition of ‘Restricted Network’ PSD cannot operate in our market without the E-Money
Directive EMD is yet to be timetabled, could be 2009 Definitions in PSD are likely to be copied into EMD
Good News?
Payment Services Directive
Current – an emoney licence is required to operate most restricted and open loop gift card programs
Group retailers sell and redeem each others cards
Gift Cards between companies
Current Retailer A sells gift card in
London, redeems in Dublin store
Issue: Dublin is owned by Retailer A (Ireland) Ltd, London owned by Retailer A (UK) Ltd
Issue and redemption is between two difference parties so emoney applies
Gift Cards between companies
Current Retailer A sells gift card in
London, redeems in Dublin store
Issue: Dublin is owned by Retailer A (Ireland) Ltd, London owned by Retailer A (UK) Ltd
Issue and redemption is between two difference parties so emoney applies
New Directive Proposal Emoney will not apply Closed loop program ‘Commercial agreement
between two companies’ ‘Restricted Network’
Gift Cards between franchises
Current Franchisee A sells branded gift
card, franchisee B redeems branded gift card
Issue: Even though to the consumer the brand is the same franchisee A has no company relationship with franchisee B
Issue and redemption is between two difference parties so emoney applies
Gift Cards between franchises
Current Franchisee A sells branded gift
card, franchisee B redeems branded gift card
Issue: Even though to the consumer the brand is the same franchisee A has no company relationship with franchisee B
Issue and redemption is between two difference parties so emoney applies
New Directive Proposal Emoney will not apply Closed loop program ‘Commercial agreement
between two companies’ ‘Restricted Network’
Gift Cards between companies selling same product rangeCurrent Company Z sells petrol,
company X sells petrol, company Z sells gift card, gift card redeemed by company X. Both companies take part in the National Petrol Gift Card Scheme
Issue and redemption is between two difference parties so emoney applies
Gift Cards between companies selling same product rangeCurrent Company Z sells petrol,
company X sells petrol, company Z sells gift card, gift card redeemed by company X. Both companies take part in the National Petrol Gift Card Scheme
Issue and redemption is between two difference parties so emoney applies
New Directive Proposal Emoney will not apply Closed loop program ‘Commercial agreement
between two companies’ ‘Restricted Network’ –
companies selling the same product range, no restricted on product range or number of stores
Payment Services Directive
EMD must follow same definitions for it all to have positive effect on industry
E-vouchers (especially by mobile phone) have yet to be considered
Does this really protect the consumer – which is part of the objective?
Only guidelines and UK Treasury interpretation of the directive – see Treasury website or contact VA office for link
Harmonisation of VAT on vouchers and gift cards
EC voucher proposals update Impact of other changes/proposals What does it mean for you? Other UK developments Questions?
Overview
A Commission priority since 2000 Public consultation December 2006 - May 2007 Issues remain:
Divergence of treatment between different Member States Cross border treatment Growing use of vouchers and gift cards ECJ referrals not providing clarity
Scope: ‘voucher’ defined widely
EC proposal - vouchers
Voucher = supply of a separate right Must relieve the supply from VAT
levying VAT where none due on final consumption double taxation
Definitions okay Single Purpose Voucher – limited use Multi Purpose Voucher – disregard supplies other than redemption
UK intermediary rules unnecessarily complex and burdensome
Vouchers acting as general payment services should be exempt
EC consultation – Va submission
Start by harmonising current VAT treatment Proposed voucher definitions are inadequate Distribution chain must be specifically addressed Unredeemed vouchers should be relieved from tax Premium rates: depends on underlying contracts MPV v means of payment: neutrality between ‘innovative
general payment schemes’ and traditional payment schemes is fundamental
EC consultation – initial conclusions
Commission meeting to agree way forward 29 September 2008 Informal All Member States present
General agreement but many details not resolved
Commission will work on proposal
EC voucher proposals – current state
Define what is and what is not a voucher: boundary between voucher and payment instrument
Not a voucher if Open ended Cross border No entitlement to particular goods and services Not promoting particular suppliers Primary purpose test
No read across from regulatory framework
EC voucher proposals – current state
Single Purpose Vouchers A local solution – only in one Member State Know VAT rate of final goods or services Apply VAT when issue in place sold
Multi-Purpose General category Disregard issue Apply VAT when and where redeemed
EC voucher proposals – current state
Intermediaries One size fits all solution VAT applies to all supplies with a margin VAT invoices throughout the chain Would apply to all vouchers
VAT recovery: preserve status quo where supply reclassified as exempt
EC voucher proposals – current state
Desire to find a European solution
Key issues now included: Intermediaries Boundary with exemption
Limited interaction with other EU developments
Implications for UK rules for face value vouchers Surely not worse?
EC proposals – some observations
Commission now working on EC proposal Opportunities to influence Expect Com Doc early 2009 Lots to do to reach consensus Implementation unlikely to be 2010 or earlier
EC proposals – next steps
The VAT Package place of supply of services – 2010 and 2015 increased reporting obligations Impact of 2015 changes
VAT Financial services proposals definition of ‘account operation’ option to tax right to recover VAT
VAT anti-fraud proposals Other regulatory proposals
Payment Services Directive E-money Directive
Impact of other EU developments
Issuer
So what does it all mean?
IssuerIssuer
ProcessorProcessor
IntermediaryIntermediary
Processor
So what does it all mean?
ProcessorProcessor
IssuerIssuer
IntermediaryIntermediary
Intermediary
So what does it all mean?
Intermediar
y
Intermediar
y
IssuerIssuer
ProcessorProcessor
Loyalty Management UK – Nectar card Baxi Total Boots ‘Voupons’ Leisure Pass Prince Karunaraina Samarappuli Arachchige
Other UK case developments
EC voucher proposals Impact of other changes/proposals What does it mean? Other UK developments
Summary
Any questions?
You Gov & VAVoucher and Gift Card Research 2008
Denise Porter Andrew Johnson
Prepared by VA for members Prepared by VA for members
Background
Exec agreed to repeat 2007 YouGov research and also to do the Giftex Prepay research to create a year on year view
The presentation today is the YouGov results, the Giftex Prepay results will be available just before Christmas with a full presentation at February Members Meeting
This data is only available to members, it is not for use in press releases unless permission is given by YouGov
Press statements will be available to members once YouGov have signed off – expected mid October
If you have a specific question not answered please pose question to Andrew and he will check the data and come back with an answer
Data Tags
Total base, 2167 Gender – Male/Female split Age split – 18-24, 25-34, 35-44, 45-54, 55+ Social Grades – ABC1, C2DE Geography – London, Rest of South, Midlands &
Wales, North England, Scotland 7 questions asked
Research Facts
Carried out September 2008 (8th to 10th) On line survey, part of YouGov omnibus Total sample size 2167 UK adults Age range 18 to 55+ GB representative split men and women (48% vs. 52%) Includes vouchers & gift cards given as gifts by friends &
family (excludes from employers or incentives)
45% 43%
70% 69%
Given Received
Gift Card
Gift Voucher
Gender Split
More women (76%) than men (63%) give gift vouchers 49%of women have given a gift card 34% of men have given a gift card 73% of women have received a gift voucher, 66% of men 50% of women have received a gift card, 36% of men Only 8% of women and 16% of men have never received or
given a gift voucher or card
Age Splits
Given Voucher
54%
70% 72% 73% 72%
18 - 24 25 - 34 35 - 44 45 - 54 55+
Given Gift Card
44%
55%
48%
41%
32%
18 - 24 25 - 34 35 - 44 45 - 54 55+
Age Splits
Received Voucher
77% 77%71%
64% 64%
18 - 24 25 - 34 35 - 44 45 - 54 55+
Received Gift Card
59% 61%
50%
35%29%
18 - 24 25 - 34 35 - 44 45 - 54 55+
The Regions
Residents of Yorkshire & Humberside, South East and the East of England are most likely to give gift vouchers and gift cards
People of the North East are least likely to have given or received a gift voucher or gift card
The North West is the most popular region for gift card giving
Yorkshire & Humberside is the most popular gift voucher giving region
E–Vouchers / Digital Vouchers
Only 9% of sample have given an e-voucher Only 14% have received an e-voucher 81% have neither given or received an e-voucher Londoners are more likely to give an e-voucher West Midlands are more likely to receive and e-
voucher
Acceptability of Gift Vouchers & Gift Cards
Are Acceptable Gifts
85%
80%
89%
All Men Women
Are Not Acceptable Gifts
10%
14%
7%
All Men Women
Acceptability
As with previous research, women find gift cards and vouchers more acceptable as a gift than men
In England, northerners see vouchers and gift cards as more acceptable than Southerners (e.g.75% Londoners compared to 90% Yorkshire & Humberside)
35 – 44 year olds and 55+ find them more acceptable (88% and 87%), compared to 78% of 18 -24 year olds
We like Gift Vouchers & Cards because…….. Top reason is Choice – 84% 70% feel it gives the recipient a start towards
purchasing something at a higher price 56% feel they avoid upsetting the recipient 36% give vouchers and gift cards because it
shows they care Sample asked about last 12 months
These gifts are perfect for me...
Almost 2 out of 3 (63%) people felt gifts purchased for them were perfect
Over half 18 – 24 year olds (58%) thought gifts purchased for them were perfect
Those in the North East were happiest with their gifts (68%)
Those in London were least happiest with their gifts (60%)
Women were slightly more happy with their gifts than men (65% compared to 61%)
Sample asked about last 12 months
Would you have selected the gift yourself? Over one in four gifts (29%) received would
not have been the choice of the recipient 18 – 24 year olds were least likely to be
satisfied with their gifts 12% of the sample have exchanged a gift
received Sample asked about last 12 months
Propensity to Purchase a Gift Voucher or Gift Card
32%
13%
55%
More Likely Less Likely No Difference
Comparison to this year from last year
Preference to Gift Vouchers & Gift Cards v’s Gift 60% prefer a gift 40% prefer a gift voucher or card
35 – 44 year olds and 55+ have a higher preference for gift vouchers & cards than any other age groups (45%)
18 – 24 year olds have least preference for gift vouchers & cards (75% gift, 25% voucher / card)
In the North West virtual even split between vouchers & cards v’s gift
Londoners least likely to want vouchers & cards v’s gift (33% vs. 57%)
2007 v’s 2008 Comparisons
Giving and receiving of gift vouchers & cards similar results There is a 3% increase in the giving of e-vouchers: from 6%
to 9% Acceptability levels have decreased by 5%: 90% to 85% Choice remains the top reason for giving Gift exchange data shows similar results 32% are more likely to give a gift voucher / card in 2008,
compared to 31% in 2007
2008 v’s 2007 – Vouchers and Cards v’s Gifts
40% 39%
60% 61%
2008 2007
Prefer a Voucher /Card
Prefer a Gift
Conclusions
The general public view of gift vouchers and gift cards is virtually the same in 2007 as in 2008
Increased awareness of gift cards is not having a measured effect on propensity to purchase
Round Table Discussion
Further questions ask Andrew First 2 weeks of November Denise and Yvonne will
be hosting round table discussion to go through research in more detail.
2 hours over sandwich lunch, approx 10 places available. If first one is a success more will be planned.
Perhaps a round table in the north?
IRI Data Summary
Q1 data now available in charts Q2 data released to Issuer members yesterday Q2 data tracks same trends as Q1 Q3 data to be collected (Jul-Sept) Data is owned by the Issuer member of The VA
and copyright remains with the Issuer members
Background to data analysis
One of the key objectives of The VA is to gather & collate industry data.
Every new member has to submit historical sales data for the last three years.
The VA has collated data on behalf of members for over 6 years to build a picture of the market & help assess trends for the future.
Product Areas
VA members issue the following products:
Paper based gift vouchers Closed loop gift cards E-vouchers Open loop (Mastercard, Visa & Amex) prepaid cards Restricted loop prepaid cards
Notes: these are not mutually exclusive with members issuing any number of the above
Sales By Product – Total Sales
Paper50%
Gift Cards50%
Sales By Product
Paper82%
Gift Cards18%
CorporateCorporate
Paper24%
Gift Cards76%
ConsumerConsumer
Headlines
Total Sales – gift cards 50%, paper vouchers 50% Direct Sales – gift cards 76%, paper vouchers 24% Corporate Sales – gift cards 18%, paper vouchers
82% Total Sales – 55% direct / consumer, 45% corporate Card Sales – 90% in store, 6% gift card centre, 4%
online / other third party Q1 2008 is up 1.4% compared to Q1 2007
Going Green
Going green is becoming more important
Part of your corporate social responsibility strategy
‘Green Conferences’ e.g. Marketing Direct Green Conference 9th November
British Retail Consortium events
Cards & Vouchers Going Green
Presentation from John Weaver – IGH Solutions
Q&A withRichard Farmer – Kalamazoo
Conference 2009
Arun Glendinning
Vice Chair – The VA
Conference 2009
Wednesday 29th April 2009 Queen Elizabeth II Conference Centre Bigger & Better space for Exhibition &
Networking Sponsorship Opportunities Now Available
Last Chance to Influence the Agenda Key note speaker from retail Technology review, the current and future market scope including paper,
plastic, contactless and mobile Learning from overseas and the need for global solutions Legal and regulatory – PCI, PSD, Emoney, VAT, Breakage Marketplace statement and VA research Business to Business Incrementality or cannibalisation – are gift cards and vouchers a true
revenue stream or simply an alternative method of payment?
Industry Events
Andrew JohnsonDirector General – The VA
Industry Events - Feedback
Prepaid International Forum AGM (25.09.08) Attended on behalf of The VA by Rachelle
Smith, Exec member
Industry Events - Feedback
Prepaid International Forum AGM (25.09.08) National Incentive Show (16-19.09.08) Call Centre Expo (16-17.09.08) BRC Dinner (24.09.08) Eye for Retail Conference (23-24.09.08)
VA endorsed events
Industry Events - Future Prepaid Awards (22.10.08)
Over 200 attendees booked VA members up for awards Places still available via The VA
VRL Prepaid Conference(22 - 23.10.08) Retail Masterclass on 22.10.08
Retail Systems Awards Dinner (29.10.08) Cartes 2008 (04-06.11.08) – Paris
Industry Events - 2009 Corporate Prepaid 09 (21.01.09)
By invitation More details to follow
Prepaid Card Expo (9 – 11.03.09) – USA VA has speaking slots Good learning from US and Europe VA organising educational trip around conference, including merchandising
visits to US stores, potentially hosted by members of the Retail Gift Card Alliance, USA
Insert YouTube Clip
Step Up To The Mic!
Share some news Product launches Ask the Exec
Over to you…………..
Step Up to the Mic ..Question
Neil George – M&S was the first person brave enough to take to the stand. He asked issuer members if they would be prepared to share IRI data. This is a question for debate for the Exec for some time. The VA will arrange for a separate roundtable debate for interested parties.