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Consumers looking for instant gratification prefer open-loop prepaid cards to rebate checks, according to a white paper released last week by Dallas-based loyalty marketing firm Parago Inc. "Consumers understand the benefits of the prepaid card–it's a cash equivalent," Juli Spottiswood, president and CEO of Parago, tells CardLine. Parago ran a test during which it offered prepaid cards as an alternative to checks in a rebate program for an undisclosed retailer. The retailer gave consumers more than 4,000 rebates. Only one consumer in that group requested a check instead of a prepaid card, according to Parago. In a follow-up survey, 70% of consumers said they had a good or excellent experience paying with their prepaid card. Only about 20% of consumers spent the rebate card at the retailer where they earned it. Offering a closed-loop card that consumers can use only for that retailer does not look like a true rebate to consumers, Spottiswood explains.
