Pre-paid gift cards are most associated with gift-giving among family and friends on special occasions, or with rewards given by companies to employees as a bonus or as an incentive. However, they are used for what may seem to be a mundane, everyday purposes – providing much needed support to relatives who survive on low incomes. This is, for many, a vital application of gift cards that is too often overlooked.
Filial Piety in China
China has a deeply embedded culture of “filial piety”, i.e. providing care and assistance to parents and elder family members. In recent years, China has experienced extensive internal migration, with people moving from rural areas to urban centers. Many people do this because they can earn more money in the cities. Around 60% of all migrants send money back home, and on average, 19% of their earnings are transferred. Every year billions of $US are transferred from urban to rural areas of China.
While those sending the money want it to be used for essentials, they will not tell the recipient what they can spend the money on. Card-based remittances allow money to be spent only in a specific retailer, often a supermarket, making it more likely that it will be used for the intended purpose. At the same time, the recipient can buy what they need on a day-to-day basis.
The money sent home to loved ones not only helps the recipients maintain their lives, but crucially, because family members can be separated by thousands of miles, it is a way of maintaining an emotional bond. In fact, the Ogloba solution allows the cards to be mobile and digital so they can be customised with photos, videos, and messages, communication which reinforces the emotional bond between giver and recipient.
For the retailer of course, issuing gift cards for this purpose has benefits too. While cash can be spent anywhere, the card can only be redeemed in the issuing retailer’s stores.
Medication Relief Cards in Brazil
Brazil has also seen massive internal migration in recent decades, with around 86% of the population living in urban areas. As in China, many people move so they can earn more money, and thus help their families. It is thought that by 2020, 46% of the population of Brazil will be dependants, mainly children and elder family members (ECLAC, 2014), but also those who have become ill.
Imagine a scenario where a migrant worker has moved from a rural area, to an urban center such as Rio de Janeiro or São Paulo, leaving behind a relative who needs to take medicine regularly. Medicines are expensive, with 7% of households in Brazil (11 million) spending one-fifth or more of their purchasing power on health. Some households struggle to pay for the medication they need. By purchasing a rechargeable pre-paid medication relief card, the migrant can ensure the money is spent on essential healthcare products. The recipient no longer has to worry about covering the cost of their medication, and the giver is comforted by the fact that, although they are miles from home, they are supporting their loved one.
Indeed, such cards can be provided by charities and NGOs who are striving to provide affordable medicines to those in need. Patients with chronic ailments need to take prescribed drugs regularly, and over the long-term. The rechargeable, pre-paid gift cards allow them to purchase the medication they need, from a local pharmacy, so recipients are far more likely to buy, and take, their medication. Ogloba’s platform allows restrictions by SKU number to be placed on cards, so the cards can only be used for designated products.
Family Support in Mexico
While China and Brazil have experienced massive internal migration, Mexico has seen millions of its citizens move to other countries to find work. Many of them have moved north to live and work in the United States. Around 11 million Mexicans live in the United States, and around US$2 billion is sent from the US to Mexico each month.
Transferring money from the US to Mexico costs a fee each time. While the fee may be small, perhaps “only” $5, it is money swallowed up by transfer fees, instead of it being spent on essentials such as food, education, clothing, and healthcare.
Ogloba’s platform facilitates one method of avoiding such charges by allowing money to be credited to a card in one country, and redeemed in another country. The card can be bought and charged at a partnering retailer’s outlet or e-commerce site in one country, i.e. in the United States, but redeemed in the retailer’s store in another, i.e. in Mexico. There is no charge for this if the money is spent in-store, but a fee applies if the card value is cashed.
Rethinking the role of giftcards
While is a great feeling to receive a gift card on your birthday, or as acknowledgement of a job well done, they can be used in ways that make everyday life easier for millions of people. Ogloba’s innovative and flexible platform allows gift cards for almost any purpose to be configured, and managed, for the benefit of all stakeholders.