Teens may be interested in receiving reloadable gift cards as holiday gifts, but parents have not been on board with the trend, suggest the results of a recent survey from BillMyParents, a provider of reloadable prepaid card for teens.
The data reflect the challenge that prepaid marketers have in trying to address the teen market, according to one analyst.
Asked if they had ever given their teen a reloadable prepaid card, only 17% of those surveyed said they had, while 63% said they had never done so (see chart). This is in contrast to what teens say they want: Nearly half surveyed chose a $200 open-loop prepaid card over other gifts of equal value, according to the 2010 BillMyParents Holiday Survey. In the survey, 52% of parents said they won’t give teens reloadable gift cards this year, while 48% said they were considering it or were very likely to do so.
BillMyParents surveyed 157 U.S.-based teens ages 13 to 18. The parent portion of the survey used a panel of 75 U.S.-based parents of at least one child age 13 to 21 from 35 different states. The company conducted the online survey Nov. 4 to Nov. 10.
Part of the reason why relatively few parents have given their teens prepaid cards may be that many still consider reloadable cards products for unbanked or underbanked consumers, says Ben Jackson, senior analyst at Mercator Advisory Group. “That 17% is representative of the education that needs to be done in the market for prepaid cards,” he says. “The industry needs to help consumers, businesses and governments understand all the different uses for reloadable prepaid cards. You can apply them in a lot of different ways, including for monitoring teen spending.”
The teen market is fickle and may be difficult to nail down, Jackson notes. Some prepaid cards may be marketed as giving parents control, but the kids may not like that and would prefer to receive cash, he says.
“The teen market is an example of trying to get at a large market that is very vulcanized within in that it seems like the same demographic, but it’s really not,” says Jackson. “Is the football player going to want the same card as the skater kid?”
BillMyParents parent SocialWise Inc., for example, has tried to market its product with extreme sports athletes. It started a marketing campaign for its BillMyParents online-payment system through social-networking sites in early August that could reach 4.6 million followers of Twitter, Facebook and Myspace (see story).
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