What has been dubbed “the most wonderful time of the year” can often be a primary source of headaches for consumers. In the approaching months, hours of valuable time will be spent searching through clothing racks; sleep will be lost as parents rush to the toy stores at 5:00 a.m.; and generosity will be rejected after consumers are sent to return unwanted presents. However, the quick purchase of a single item can remove almost all pressure from the gift giver — a gift card.
The gift card-giving trend continues to gain popularity. In fact, the gift card replaced apparel as the top gift purchase in recent years. According to a survey from the National Retail Federation, more than two-thirds of consumers polled last year intended to buy at least one gift card as a holiday gift. As a result, manufacturers of plastic products are capitalizing on this latest niche. “Everybody I talk to in the industry is gearing up for that market. The larger companies such as Wal-Mart and K-Mart have already purchased enough [gift cards] last year to hold them over, unless they’re running a new marketing campaign,” said Terry Hardy, vice president of sales and marketing for Plastilam, Salem, Mass.
Dean Boustead, sales manager for Allegheny Printed Plastics, Cranberry Township, Pa., shared Hardy’s sentiments. “The gift and loyalty card market is experiencing double-digit growth, and this trend is projected to continue over the next few years,” he noted. Boustead went on to describe the most recent growth area, the “gift card mall,” where a single retail location, such as the local supermarket, offers gift cards from a variety of retailers.
Another niche market involves an alternative to petroleum-based plastic cards. Larger manufacturers, such as Boston-based Arthur Blank and Company, are finding success with eco-friendly, biodegradable, corn-based cards. The cards can be composted, incinerated and mechanically recycled in industrial facilities. However, Hardy explained that corn cobs are currently only for manufacturing gift cards. “They don’t use [corn] for credit cards yet. Banking associations have standards set for Mastercards, Visa cards and American Express cards that require the use of polyvinyl chloride (PVC),” he said. PVC is valued for its durability and compatibility with other thermoplastics.
While corn cards enable companies to go green, they are an expensive alternative. Unless the cost of corn cards stabilizes, Plastilam will continue to produce a petroleum product for distributors looking to save a few dollars, despite the inflating prices of crude oil.
‘Tis the Season
Manufacturers began handling the mad rush of holiday orders in August and will continue to do so right up to the last possible minute. “From now until — believe it or not — Dec. 24, we’re going to have people calling up saying, ‘I need 500 or 1,000 gift cards printed in four or five days. I’m out,’” Hardy said. “I’ve been here until 8:00 or 9:00 at night and have received phone calls from distributors trying to find small quantities. It’s very difficult to find anybody in the industry who will produce 250 cards or even 500. No one wants to do those anymore.”
Plastilam has offset presses capable of fulfilling orders for 100,000 cards, but they have found a niche in producing smaller quantities. In particular, the company receives many orders from distributors selling gift cards to small restaurants.
While smaller orders may seem less intimidating than an order for one million gift cards, there are still strict deadlines to meet, and a fast turnaround time is demanded of manufacturers. To ensure holiday shoppers are able to purchase a quality gift card in time for their loved ones, Allegheny Printed Plastics invested in new equipment. “Our distributors are asking us to do more for them, so this provides more fulfillment opportunities,” Boustead stated.
The typical turnaround time for Plastilam is anywhere from 10 to 15 working days, although sometimes, the company can easily process an order in five days. And, its new Indigo digital press reduces that time even more.
“The great thing about digital presses is I can print four-color process on both sides, virtually at the same time,” Hardy said. "An order of 10,000 cards offset and with four-color process might take a week of just press time. With a digital press, it might take three or four hours.”
These time-saving practices allow manufacturers to work on other “must have’s” for the holiday season. This year, end-users are asking for gift cards with added features. Eye-catching 3-D holographic cards, peppermint-scented scratch ‘n sniff cards and special packaging are some of the hottest requests.
Plastic Perks
With the overwhelming demand for gift cards, it is easy to forget about the other available plastic products. More than 50 percent of Americans use loyalty cards on a regular basis. Similar to a gift card, these cards range from .012" to .030" and can be rectangular or an imaginative die-cut shape. Hardy recalled receiving requests for glow-in-the-dark inks. He cautioned that these inks are comparatively expensive and must be purchased with certain quantity requirements. Some distributors don’t realize that 20 lbs. of ink is necessary for an order of 500 cards, yet only a small amount of ink will be used in the end. Hardy recalled a membership card with a skull-and-crossbones image, enhanced by glow-in-the-dark inks made for a distributor located in New Orleans for Mardi Gras.
“Plastic cards are an advertising piece, but they’re useable. They get people into private floors at a Hyatt or a Hilton, for instance,” Hardy said. “The smaller distributors are competing against the larger houses now and they’re out pounding the bushes, looking for anything, whether it’s an advertising specialty product, membership card, gift card or access entry cards to hotel rooms.”
Nevertheless, many distributors are frightened by plastic. “I try to explain to [distributors], it’s a printed object. It’s just like a sheet of paper. I print on it,” Hardy joked. “Also, with gift cards, a system needs to be set up with [the supplier of] the POS system. People get frightened to death by this process, but it actually takes only five minutes to 30 minutes to activate over the phone or through the computer,” he stated. Hardy suggested distributors work with small pizza and sub shops, especially those located near college campuses filled with hungry, broke students looking to escape the horrors of cafeteria food.
When selling to end-users, distributors must remember that a market for gift cards exists beyond the holiday season, whether it’s for birthdays, weddings or graduation presents. Manufacturers of plastic products are encouraging distributors to ask questions and take advantage of the numerous applications of this product. Said Hardy, “If manufacturers explain how plastic is used and why it’s used in a certain way, it makes all of the difference in the world.”
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- Plastilam