Welcome
Rachelle Smith
PrePay Solutions
Co-Chair UKGCVA
Welcome
• New Member
– allpay
– First Data
– Smartbox
– Smart Plastic Cards
• Guests
–
–
–
–
–
–
Amazon
Carlson Europe
Corporate Innovations
Dunelm
Luminescence
The Royal Mint
Conference
• Wednesday 21st April 2010
• Lancaster London
• Lead sponsor is PrePay Solutions
(used to be Royal Lancaster Hotel)
Speakers include
•
•
•
•
•
•
•
Tim Danaher – Retail Week
Rebekka Rea – Retail Gift Card Association, USA
Cindy Mielke – JCPenney, USA
Richard Burchill – Arcadia
Ali Jones – Debenhams
Ian Sanders – WHSmith
Matt Lanford – MasterCard
Agenda
Agenda
Exhibition
• Only 2 stands remaining
• £1750 rate for members
• Exhibition during arrival, morning coffee, lunch,
afternoon tea and drinks reception
Delegate Rate
• £175 – member (No Free Places this Year)
• £250 - non member
• Book online via members web portal
• 30% of members have not booked yet
Andrew Johnson
Director General
Agenda for Today
•
•
•
•
Fraud Group
Regulation Group
Ernst & Young Data
Market Research Group
• Lunch
• Issuer Members Only – EY Data Workshop
Fraud Prevention Project Group
Update
Graham Sellors
Fraud Prevention Project Group
Members
•
•
•
•
•
•
•
•
•
Mike Avery – Smith & Ouzman
Tracey Brown – Bemrose
David Butler - National Garden Centres
Julie Coxhill – DX Group
Alex De Berry – Book Tokens
Malcolm Edney – Kalamazoo
Nicky Jeffrey – Smith & Ouzman
Brian Kenworthy – Orion
Tony Rich – Halfords
•
•
•
•
•
•
•
•
Martin Rooney – Gift Voucher Shop
Andrew Sellers – John Lewis
Graham Sellors – Jordan Media
Simon Truelove – Nitecrest
Jon Walkington – Ceridian SVS
Caroline Watson – Voucherline
Yvonne West – Sainsbury’s
Julie White – Grass Roots
Fraud Prevention Project Group
Where we are
• Need to indentify potential fraud risk in all aspects of the gift voucher
and gift card production and sales chain
• Current focus on 4 key areas:
– Additional security on vouchers
– Dispelling gift card fraud myth
– Security in delivery of vouchers
– eBay and voucher/card reselling
• Long term objectives in discussion
Fraud Prevention Project Group
Security on Vouchers
Graham Sellors - UKGCVA
Nick Cooper - Luminescence
Fraud Prevention Project Group
Security on Vouchers
• Various security features already in use by members on their
individual vouchers
• Printers came together to suggest an additional feature
exclusive to UKGCVA members
• Use of a thermochromic ink as an additional feature to those
you already have
• Nick Cooper from Luminescence
Fraud Prevention Project Group
Tri-Thermochromic & Fluorescent ink
• Combination of overt & covert features
• Tri-Thermochromic: Grey to Green at 25°C &
Green to Yellow at 35°C. Can be easily verified
in most ambient temperatures
• Yellow UV fluorescence as secondary verification
feature
Below 25°C
Above 25°C
Above 35°C
Fraud Prevention Project Group
Security on Gift Cards
Graham Sellors
Andrew Johnson
Fraud Prevention Project Group
Gift Card Fraud
• Like vouchers, issues with stolen credit cards used to
purchase gift cards
• Press before Christmas due to Corsaire White Paper, stating
mag stripes on gift cards are easy to copy
• Corsaire is a security consultancy specialising in mag stripe
fraud – just a PR stunt
• Group working with Gift Card Processors to formulate best
practice for gift card processing
Fraud Prevention Project Group
eBay & Reselling Gift Cards
Graham Sellors
Caroline Watson
Andrew Johnson
Fraud Prevention Project Group
eBay – reselling
• Customers are buying ‘second hand’ gift vouchers and cards
eBay.
• These may have been obtained fraudulently or the gift cards
may have no value
• Damaging to the industry
• eBay wont do anything to stop this happening
• Can we stop eBay selling gift cards and vouchers?
• Written a buyers guide to be placed on eBay
• Hints placed that buyer may end up with nothing
• What else can Issuers do?
Fraud Prevention Project Group
eBay – play their game
• In the USA, emergence
of several ‘resellers’ of
gift cards via internet
sites
• Examples include Plastic
Jungle
Fraud Prevention Project Group
eBay – play their game
• Exchange unwanted gift
card for cash or one you
want
• Donate the card you
don't want to charity
• All above board and
legitimate
• Big retailers in USA all
participate
Fraud Prevention Project Group
Solution
• Plastic Jungle are already looking at the UK
• Should the Association be proactive in this sector
• Do a deal so the Association ‘owns’ the concept in
the UK
• Association sets the rules and has some control
• May even make small revenue
Fraud Prevention Project Group
Delivery - Best Practice
Julie Coxhill – DX Group
Fraud Prevention Project Group
Julie slides
Fraud Prevention Project Group
Fraud Prevention Project Group
Moving Forward
Graham Sellors
Fraud Prevention Project Group
Long Term Objectives
• Better relationships with:– Merchant services providers
– Card issuing banks
– On line auction operators
• Greater co-operation between Issuer
members and Service providers
• UKGCVA Code of Conduct
Fraud Prevention Project Group
Long Term Objectives
• Making sure UKGCVA members are in control
• We may not beat fraud but at least we need to ensure that
we have explored every avenue to minimise its effects on the
UK gift card and voucher business
Fraud Prevention Project Group
Any
Questions?
Regulation Group
Siobhan Moore - Salans
Regulation Group Members
•
•
•
•
•
•
•
•
•
•
Siobhan Moore – Salans
Julie White – Grass Roots
Jon Walkington – Ceridian SVS
David Butler – National Garden Gift Vouchers
Alex De Berry – Book Tokens
Toby O’Reilly – Ernst & Young
Helen Child – GTP
Ajay Sethi – PrePay Solutions
Deirdre Synnott – Gift Voucher Shop
Robert Courtneidge - Salans
Regulation Group Objectives
• Legislation in all aspects of the value chain
• Current focus on two areas which are going
through changes the European Union:
– Emoney Directive
– Harmonisation of VAT on Vouchers
Emoney Directive
Siobhan Moore
Where we are
• Formulated a simpler table to assist in defining
Emoney products
• Attended 2 meetings with HM Treasury to ‘present
our case’
• Treasury have met with European counterparts
and used our table as part of their presentation
Current e-money definition
Monetary value, as represented by a claim on the
issuer, which is:
– Stored on an electronic device
– Issued on receipt of funds of an amount not less in value
than the monetary value issued
– Accepted as a means of payment by undertakings other
than the issuer
New e-money directive
Effective April 2011
• Any electronically, including magnetically, stored
monetary value as represented by a claim on the
issuer which is:
– Issued on receipt of funds for the prupose of making
payment transactions
– Which is accepted by a natural or legal person other
than the issuer
1. Paper Voucher
Definition
Where value is not stored electronically, single use or voucher given
as change
Example
National Garden Gift Voucher
Today, In or Out?
Falls outside e-money directive as product is not electronic
2011, In or Out?
No change
2. Paper Voucher
Definition
Paper Voucher with limited electronic application where voucher
number is stored online but a voucher, not cash, is given as change
Example
John Lewis
Today, In or Out?
Fall outside e-money directive as only used for validation purposes
2011, In or Out?
No change
3. Electronic/Virtual/Digital
Definition
Electronic, virtual or digital voucher for redemption at site on one legal
owner
Example
Amazon
Today, In or Out?
Fall outside e-money directive as single legal entity involved
2011, in or Out?
No change
4. Gift Card
Definition
Redeemed in issuers own stores or online at issuers own site. One
legal entity, i.e. The same group company issues and accepts gift
cards as payments for goods/services (closed loop)
Example
Harrods, Selfridges,
Today, In or Out?
Fall outside e-money directive as single legal entity involved
2011, In or Out?
No change
5. Multi Brand Gift Card
Definition
Redeemed in stores or online under different brand names but there
is only one legal entity, i.e. The same group company issues and
accepts gift cards as payment for goods/services (closed loop)
Example
Arcadia
Today, In or Out?
Fall outside e-money directive as single legal entity involved
2011, In or Out?
No change
6. Single Brand Gift Card
Definition
Redeemed in own stores or on line but complex group structure such
as membership, franchise or international companies accept gift
cards
Example
Debenhams (if accepted in Irish stores), Starbucks
Today - In or Out?
E-money regulations apply
2011 - In or Out?
May be able to take advantage of limited network
7. Multi Brand Gift Card
Definition
Redeemed in own stores or on line but complex group structure such
as membership, franchise or international companies accept the gift
cards (restricted loop direct connect with companies within the gift
card group)
Example
Book Tokens (new card), Kadeos (France)
Today - In or Out?
E-money regulations apply
2011 - In or Out?
May be able to take advantage of limited network
8.MasterCard/Visa Scheme Gift Card
Definition
Scheme Badged or unbadged. Use of cards in stores or on line can
be restricted by merchant id or branding
Example
One4all, shopping centre gift cards
Today - In or Out?
E-money regulations apply
2011 - In or Out?
No change however the scheme could fall within the exemptions
however MC & Visa require programs to be run under new e-money
regulations
9.MasterCard/Visa Scheme Gift Card
Definition
Scheme Badged or unbadged. Unrestricted use, accepted wherever
the scheme badge is displayed. (open loop)
Example
General purpose prepaid cards
Today - In or Out?
E-money regulations apply
2011 - In or Out?
No change
Next Steps
• Continuing to liaise with Treasury
• Expect legislation to be in place by April 2011
• Expect to get confirmed timetable by January
2011
Any
Questions?
Harmonisation of VAT on
Vouchers
Toby O’Reilly – Ernst & Young
Andrew Johnson - UKGCVA
Where we are
• EU have been looking at VAT on vouchers for
nearly 3 years
• We have engaged with EU Commissioner and
expected to be invited to attend meeting
• Unexpectedly EU have commissioned research
on our sector across all member states
• Andrew has been liaising with Deliotte Belgium
who are doing research on behalf of EU
• Asked to submit data for UK market
Deliotte Research
• Deloitte research is intended to support ‘Economic
Impact Assessment that will inform proposed VAT
changes
• Based on broad, poor definitions used in last draft
consultation document:
– Multi Purpose Vouchers (almost everything)
– Single Purpose Vouchers (almost redundant)
– ‘Paid Product Discount Vouchers’ (not very relevant)
• Approach to gathering data is patchy and not
representative: only asking some traders
Why do you need to know?
• Critically, research demonstrates lack of
understanding of the voucher market
• No recognition of:
–
–
–
–
–
–
–
B2B v B2C
paper v plastic
Different roles, including issuers v intermediaries
‘retailer’ v ‘credit’ voucher regimes
sales at discounts to face value
Border line with financial services
Use of composite rates in UK
Why do you need to know?
• Could change the way you account for VAT on the
sale and redemption of gift vouchers and gift
cards
• E.g. VAT could be charged on sale of
voucher/card rather than redemption
• Could ‘overturn’ 2003 Schedule 10A VAT
• No recognition of the Emoney Directive and
therefore under EMD open loop gift cards are VAT
exempt, under VAT ruling they are subject to VAT
Next Steps
• Arranged to meet Deliotte and EU Commissioner
in Brussels on 16th March
• Already submitted sales data to Deliotte to
determine the overall % of the total gift sales in
the UK
• Agree next steps after meeting in Brussels
Any
Questions?
Ernst & Young Data
Andrew Johnson, UKGCVA
Bill Alexander, Red Letter Days
Data Summary 2009
• Members report sales of £1.9bn for 2009
• Total market estimate at £3.8bn for 2009
• Already submitted sales data to Deliotte to
determine the overall % of the total gift sales in
the UK
• Agree next steps after meeting in Brussels
Market Research Sub Group
Andrew Johnson, UKGCVA
Alastair Bellwood, Debenhams
Pam Matthews, Incomm
David Butler, NGGV
Caroline Watson, SS
Tony Craddock, GPE
Alex deBerry, Book Tokens
Jon Walkington, SVS
Martin Rooney, one4all
Amanda Farrell, Asda
Where were we?
• Lack of relevant meaningful market data
• Good research can help to
–
–
–
–
–
–
–
Increase sales
Planning & forecasting
Inform trends
Understand other members’ markets
PR stories
Attract new members & inform other sub committees
Speak as one authoritative voice
Scope of sub committee
• Use UKGCVA as resource to pool existing research
• Commission comprehensive consumer research
–
–
–
–
Ideally conducted every 3 years
Who is the customer, how do they segment
What are their need states, how and what do they buy
What is the decision tree; how do they display loyalty and
propensity to buy
– What are their motivations and barriers to purchase
– To include buyer and recipient in the retail environment
– To include paper, plastic, contactless and environmental relevance
• Further research (funding dependent) focused on the
market in general; specifically B2B
How To Achieve This
• Collate data from UKGCVA members that can be shared
amongst other members – this should be free
• Commission comprehensive consumer research – already
happening
– Using the UKGCVA central fund
– And/or sharing the cost of research by each member contributing
to a co-operative budget
• Further research (funding dependent) focused on the
market in general; specifically B2B
Dare you share?
• Benefits of sharing
– Everyone can apply some results to their own business
– Obvious cost savings, internal marketing, good reason
to join UKGCVA
• Examples
– Asda Savings card research produced surprising results
about incrementality
– Multichannel tracker gave insights into which retailers
score best in awareness, consideration and purchasing
of 1,000 nationally represented people
New Research
• Biggest research project ever undertaken by the
UKGCVA
• Specifically designed for us, the industry
• Diligent selection of agency
• Methodology
– Omnibus survey to determine market penetration
– 8 in depth U&A focus groups spread nationally and
demographically
– 500 face to face interviews of at least 15 mins
– Acorn and/or Mosaic profiling for each of the defined
segments
Why is it relevant to me?
• Issuer Members
– Help to understand your
customer
– Sell your business internally
– Can inform your strategy or
plan
– Gain an advantage over nonmember competitors
• Service Members
– Views of service members
helped shape the research
brief too..
– Quality research helps us
understand both current and
potential customer needs
– Sense check your business
model and strategies by
correlating findings with your
service offering
What if you pay?
• See the full results at presentation from
Action Point on 22nd June (next members
meeting)
• Opportunity to ask Action Point specific
questions on the research
• Printed copies of each research section
results to take away
What if you don’t pay?
• A brief overview of the project which will be
delivered in two parts:
– Part one – Omnibus results at the conference
– Part two – top line summary at the next members
meeting on 22nd June
– The same as the press release
Any
Questions?
Andrew Johnson
Director General
UKGCVA has moved!
• Main numbers
– 0870 241 6445
– 01344 393068
• New Phone Numbers:
– Andrew 01344 393322
– Sarah 01344 393323
– Andrea 01344 393324
• Address
Atrium Court
The Ring
Bracknell
Berkshire
RG12 1BW
All email addresses remain the same
Lunch & Networking