Prepaid-Card Distributor Tests Chicago DM Waters

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Every conference has its unusual exhibitor. The candidate this year at the Chicago Direct Marketing Days & Expo April 14-15 was SVM LP, a distributor of prepaid gasoline and retail gift cards.

The Schiller Park, IL, business works with companies like ExxonMobil, BP Amoco, CITGO, Blockbuster and Barnes & Noble in an environment that is increasingly moving from paper to plastic card. But now it is targeting a business that bets its livelihood on loyalty from customers.

"This is our first attempt in the direct marketing industry," said Jim Speir, director of sales at SVM, formerly known as Stored Value Marketing.

The company most recently signed a contract with oil company Sunoco to launch a prepaid card for use at gas stations. That deal followed a similar arrangement with Conoco, another oil company.

Prepaid gasoline cards look like credit cards but have a prepaid dollar amount that can be used for buying products and services at gas stations' pumps and convenience stores.

SVM's products are positioned for promotions, incentives and rewards. It offers fully customized cards, thermal imprints and decals, branded envelopes, wallets, key chains and luggage tags.

An SVM Options program targets individuals. Companies choose a dollar amount on, and recipients select the gift card or certificate they want. About 70 retailers and restaurant chains have signed up including Marshalls, T.J. Maxx, The Home Depot, Bath & Body Works, Red Lobster and Starbucks Coffee.

But it is incentives and rewards programs that SVM is known for. The company has created prepaid gas cards for oil companies such as ExxonMobil, 76/Circle K, ARCO, Speedway SuperAmerica, Phillips 66, CITGO, BP Amoco, Sheetz, Shell and Diamond Shamrock.

Though SVM did not disclose names, it claims an electronics company asked SVM to provide prepaid gasoline cards to promote a mid-range-priced electronics item through a mail-in rebate. SVM managed fulfillment, from receiving the response letters to mailing the cards.

In another promotion, a major automaker offered prepaid gasoline cards as an incentive on a national promotion. The first month's results persuaded the company to extend the promotion by another two months.

Customers of SVM can promote their brand in a couple ways. They can develop a specially designed custom card. Or they can put their company logo on the front of one of SVM's cards.

SVM's client list includes virtually every major oil company. Its retailer and restaurant chain roster is equally impressive. But it is the grocery market that now offers expansion opportunities.

Grocery brands, however, are not as national as mass merchandisers, specialty retailers and hospitality chains. Still, SVM has clients like Albertsons and its Sav-On and Jewel Osco siblings, as well as Winn-Dixie.

The company aims to broaden its grocery chains list so that it can offer prepaid grocery cards for use on a national scale.

SVM's retail, travel and food gift cards and certificates are available directly from the marketer or in denominations from $5 to $100. Cards can be bought in any quantity as long as the order is at least $250.

Premiums of 0.25 percent to 5 percent of the card's face value, plus shipping, are charged. In some cases, cards are sold at face value. Charges vary per card.

"Our new corporate mission, in addition to being the No. 1 prepaid gasoline card distributor, is the grocery market," Speir said. "We brought someone on our staff to handle this."

Simultaneously, it is testing the DM industry waters. Taking a booth at the Chicago Association of Direct Marketing's annual show was a logical step for a company in the Chicago area.

"My impression has been that it's a little slow in terms of prospects," Speir said April 15, the second day of the show. "I've scanned six to seven people today in a couple of hours. [But] some of them seem to be fairly good prospects."

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