Prepaid Cards in Canada: Traditional and Incentive/Loyalty Cards

In Canada, prepaid cards are issued by banks under the Mastercard or Visa systems. This means that they're acceptable at any location that accepts credit cards, generally*.

Reloadable vs. Non-Reloadable (Throw-away)

Prepaid cards can be classified as 'reloadable' and 'non-reloadable'. A non-reloadable card is purchased for a set amount, used until empty and then disposed of. The reloadable cards can be reloaded by the same individual, for example, through online bill payment, until they hit their expiry date as specified on the card.

You Pay vs. Someone Else Pays Prepaid Cards

There is a growing branch of prepaid cards in Canada, and they differ in who funds the cards. With traditional prepaid cards, like those purchased directly from a retailer or a bank, the end-user funds the card. The growing 'incentive' or 'loyalty' branch of prepaid cards are funded by a 3rd party, such as an employer or as a part of a marketing plan, like take a test drive.

These incentive/loyalty cards can have their fronts and backs overlaid with the name, logo, slogan and artwork of the company paying for the card.

Use a Prepaid Card Reward instead of Cash Rewards

Incentive/loyalty cards allow for an employer to more directly give commissions or rewards to an employee. The employee sees the company's name every time they spend the fruits of their labour (and hopefully get that warm 'n fuzzy feeling for the funder of the card). Similarly, a loyalty or promotional reward from a retailer would have the same effect: showing their appreciation and name on every use of the card, an excellent marketing coup.

From an incentive or loyalty prepaid card point-of-view, a respectable company is important to work with. Many of the traditional consumer prepaid cards have terrible fees, charges and penalties, so it's important to choose the right prepaid card vendor for a loyalty/incentive program to avoid consumer disappointment. If a consumer thinks they're getting a bad deal, such as high fees, it looks bad on the company that's trying to market themselves with the card.

* As long as a name and address is registered with the card, one should have no troubles ordering online with them just as they would with a regular credit card. Problems typically arise when online fraud systems detect non-matching addresses, or non-existent names and addresses.

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