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Welcome. Rachelle Smith PrePay Solutions Co-Chair UKGCVA.

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Presentation on theme: "Welcome. Rachelle Smith PrePay Solutions Co-Chair UKGCVA."— Presentation transcript:

1 Welcome

2 Rachelle Smith PrePay Solutions Co-Chair UKGCVA

3 Welcome New Member –allpay –First Data –Smartbox –Smart Plastic Cards Guests –Amazon –Carlson Europe –Corporate Innovations –Dunelm –Luminescence –The Royal Mint

4 Conference Wednesday 21 st April 2010 Lancaster London (used to be Royal Lancaster Hotel) Lead sponsor is PrePay Solutions

5 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

6 Agenda

7

8 Exhibition Only 2 stands remaining £1750 rate for members Exhibition during arrival, morning coffee, lunch, afternoon tea and drinks reception

9 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

10

11 Andrew Johnson Director General

12 Agenda for Today Fraud Group Regulation Group Ernst & Young Data Market Research Group Lunch Issuer Members Only – EY Data Workshop

13

14 Fraud Prevention Project Group Update Graham Sellors

15 Fraud Prevention Project Group 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 – Sainsburys Julie White – Grass Roots Members

16 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

17 Security on Vouchers Graham Sellors - UKGCVA Nick Cooper - Luminescence Fraud Prevention Project Group

18 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

19 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

20 Security on Gift Cards Graham Sellors Andrew Johnson Fraud Prevention Project Group

21 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

22 eBay & Reselling Gift Cards Graham Sellors Caroline Watson Andrew Johnson Fraud Prevention Project Group

23 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

24 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

25 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

26 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

27 Delivery - Best Practice Julie Coxhill – DX Group Fraud Prevention Project Group

28 Julie slides Fraud Prevention Project Group

29 Fraud Prevention Project Group Moving Forward Graham Sellors

30 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

31 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

32 Any Questions?

33

34 Regulation Group Siobhan Moore - Salans

35 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 OReilly – Ernst & Young Helen Child – GTP Ajay Sethi – PrePay Solutions Deirdre Synnott – Gift Voucher Shop Robert Courtneidge - Salans

36 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

37 Emoney Directive Siobhan Moore

38 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

39 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

40 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

41 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

42 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

43 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

44 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

45 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

46 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

47 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

48 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

49 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

50 Next Steps Continuing to liaise with Treasury Expect legislation to be in place by April 2011 Expect to get confirmed timetable by January 2011

51 Any Questions?

52 Harmonisation of VAT on Vouchers Toby OReilly – Ernst & Young Andrew Johnson - UKGCVA

53 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

54 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

55 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

56 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

57 Next Steps Arranged to meet Deliotte and EU Commissioner in Brussels on 16 th 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

58 Any Questions?

59

60 Ernst & Young Data Andrew Johnson, UKGCVA Bill Alexander, Red Letter Days

61 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

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63 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

64 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

65 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

66 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

67 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

68 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

69 Why is it relevant to me? 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 Issuer Members –Help to understand your customer –Sell your business internally –Can inform your strategy or plan –Gain an advantage over non- member competitors

70 What if you pay? See the full results at presentation from Action Point on 22 nd June (next members meeting) Opportunity to ask Action Point specific questions on the research Printed copies of each research section results to take away

71 What if you dont 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 22 nd June –The same as the press release

72 Any Questions?

73

74 Andrew Johnson Director General

75 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

76 Lunch & Networking


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