Reloadable Debit Cards: Introduction, Options, and Benefits 

It’s no secret that rewarding good behavior is more effective than punishing bad behavior. Neuroscience suggests that our brains have evolved to a degree where we anticipate we’ll gain rewards with action.

Dopaminergic neurons trigger a signal in our brain to “go” when we expect something good. That’s why incentive programs work well for employees, third-party sales reps, and customers.

There are many types of incentive programs for each of these groups, but when it comes to employee incentive programs, we’ve listed six of the best. They vary from recognition programs to professional development programs and, of course, the ever-popular monetary rewards program.

When it comes to delivering a monetary reward in the form of cold, hard cash, there are a couple of options on how, as the employer, to get the best return reward for the organization while recognizing and rewarding the individual.

Still with us? You can present a monetary reward with actual cash, by writing a check, or by transferring funds via ACH/direct deposit. While each of these delivery systems absolutely rewards your employee and makes them feel validated and acknowledged, there’s a way to get the same gains while also getting something for the organization.

Skip the cash, check, or direct deposit and consider investing in a reloadable debit card.

Before we dig into the reasons this little plastic card can have incredible benefits for you, let’s distinguish the difference between debit cards that are currently available.

There’s More Than One Type of Debit Card

On the surface, you may think you know everything you need to know about a debit card. They’re the same size as a credit card and can also be used to make purchases.

According to a survey conducted by TransUnion, Americans favor debit cards over credit cards. When it comes to making everyday purchases, 44% of us typically use a debit card, while 34% of us typically use our credit card.

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But not every debit card is the same. The type of debit card we generally think of is one that’s linked to our bank account. As long as you have money in your account, you can use your debit card to immediately and directly make a payment.

The money won’t leave your bank account until the moment you use the card. A debit card like this is tied to a specific “demand deposit account,” such as a checking account. It falls under Regulation E, a Fed Reserve regulation governing certain electronic funds transfers.

Then there are prepaid debit cards. These cards are preloaded with funds and are as good as cash. The money on the card isn’t linked to a bank account but is connected to an “omnibus” account.

Different Types of Debit Cards

You may be surprised to learn that prepaid debit cards are big business. The use of these types of debit cards grew significantly throughout the pandemic, and estimates are that by 2026 their global market will equal $2.7 trillion U.S.

Prepaid debit cards can be open-loop or closed-loop cards. Open-loop cards let you use them almost the same way you can use a credit or debit card. Closed-loop cards can only be used in one place of business.

The account owner is usually the company or organization that issues the card. Prepaid cards require you to sign the transaction, just like you would when using your credit card.

And while a regular debit card is ideal as a way to access your own bank account funds, a prepaid debit card is most commonly used for a company incentive program. It’s a great delivery system to give cash rewards to your employees.

To make it even better, a prepaid debit card that’s reloadable lets you reward your employees while giving you significant benefits.

How Reloadable Debit Cards Work

Before we break down the benefits of using a reloadable debit card to deliver your employee incentive rewards program, let’s take a look at how they work. For convenience, we will refer to these cards as simply “reloadable debit cards,” not the more wordy “prepaid and reloadable debit cards.”

In its simplest form, getting a reloadable debit card is as easy as:

  • Buying the card
  • Adding the money
  • Giving it to your employee

The employee can then activate the card, put it in their wallet or pocket, and go shopping. The company issuing the card can reload and add money to the same card by phone, by direct deposit, by going in-person to a bank, or by going online.

A Reloadable Debit Card

Many reloadable debit cards are issued in partnership with major credit and debit card networks like Mastercard, Visa, or American Express. This lets the card be used anywhere these networks are accepted.

Depending on the financial institution, there may be fees associated with the reloadable debit card. Some of these fees may be:

  • A fee to activate the card
  • A fee to use the card
  • A monthly service fee
  • A fee to reload the card
  • A fee to use the card at an ATM

Few banks will charge all these fees, but it’s worth reading the fine print to make sure you understand what fees you will be charged. There may also be limits imposed on how much you can add to the balance at one time and how much your employee can spend at one time.

Reloadable debit cards are an ideal way to quickly dispense incentives and rewards in any desired amount, track employee spending in real-time, and even reduce overall costs associated with employee expense reimbursement programs.

Why Reloadable Debit Cards Are Great For Incentive Programs

People prefer prepaid cards over cash when it comes to incentives and rewards. This is true for both the givers of rewards and the recipients. Reloadable debit cards are almost completely fungible, meaning they can be used just like cash anywhere the card is accepted and can also be personalized.

Recipients love receiving prepaid cards as a reward because they can proudly show off their cards and use them guilt-free to indulge themselves. And prepaid cards offer many of the same benefits of cash — flexibility, choice, and convenience — without having to carry around paper money or coins.

When it comes to rewards and incentives, people respond to both rational and emotional drivers. In addition to cash, merchandise, and travel, reloadable debit cards are now among the most important and essential ingredients of incentive, reward, and recognition programs.

With these cards, people get the satisfaction of being rewarded with something tangible that gives them control over what they spend it on. It allows companies to customize messages and branding elements onto the cards, which further reinforces the message behind the reward or incentive.

Reloadable Debit Card Incentive Program

We’ve found that “top-notch reward programs and top-notch rewards go hand-in-hand.” Reloadable debit cards are one of the best ways to deliver the cash rewards of an employee rewards program.

Not only do they simplify things for the issuing company, as well as the recipient — employee, third-party sales rep, or customer- but they also help you create maximum loyalty and brand affinity. The same debit card can be used over and over again, and you can easily reload your employee’s card virtually as part of the incentive program.

Every time one of your employees or a third-party sales rep pulls out that card to use it, they’re associating the pleasure and value of that purchase with your company. That’s quite a return on the investment that goes into creating these cards!

And when you brand the company card, you’ve given your organization a level of advertising that’s gets associated with only happy experiences. This may be happening subconsciously, but it’s happening just the same. Over the course of months and years of purchases, a single branded debit card has the potential to create a huge amount of positive sentiment for your brand.

The Power of Branding

Branding is incredibly important when it comes to employee incentive reward programs. The best form of reward distribution to use with an incentive program is a custom reloadable branded debit card. Companies often struggle to make emotional connections with their employees and need to understand the different motivators that will help them create those connections.

A list of over 300 emotional motivators was created to help with this, showing that employees are more emotionally connected with a brand when it aligns with their motivations and helps them fulfill what’s really important to them. For an employee incentive program, having a well-branded debit card could be essential in helping employees feel motivated and rewarded.

Branding the debit cards with your company’s logo, color scheme, and more will help easily identify your unique offering and remind your employees how much you value them.

A Company Branded Debit Card

There are several options for branded cards which include:

Stock branded cards are the cheapest type of debit card you can choose other than a non-branded card. While you’ll be saving on the cost of the card, you’ll only have the most basic and generic design options with limited features, such as a single, one-color company logo, usually in black or white.

Partial custom-branded cards cost a little more but allow businesses to add a bit of personalization to the card design. You can choose from a limited selection of colors for your company logo. Some providers may also allow businesses to choose a unique color scheme or add a photo.

Full custom branded cards cost the most but are as customized as a branded debit card can get. These cards get the full four-color treatment, a custom card carrier, the brand logo, and more. All the bells and whistles.

You can choose a non-branded card, but we don’t recommend this option as you lose out on all the brand affinity and other benefits a custom card creates.

Overall, there is an investment cost to purchasing debit cards, especially upfront. If you only need a few of these cards, the cost per card may not be worth it, but the more cards your organization needs, the better the economies of scale are. And once you’ve made the initial purchase, you won’t need to buy more until your company grows.

The Benefits of a Reloadable Debit Card

Traditional employee rewards programs, such as bonus checks or gift cards, are often limited in scope, tedious to manage, and take too long to be delivered. On the other hand, prepaid incentive cards provide an easy-to-use, flexible solution that allows employees to access funds immediately.

Reloadable prepaid debit cards can be used just like any other debit card, providing users with the convenience of using them for a variety of purchases. Moreover, these cards can be reloaded at the touch of a button, making it easier for employers to provide timely rewards.

Reloadable Debit Card Benefits

The top five benefits of reloadable prepaid debit cards for employee incentive programs are:

  1. Drive employee satisfaction and loyalty: Employees appreciate being rewarded with something they can use and enjoy, boosting their satisfaction and loyalty to their employer.
  2. Help increase workforce productivity: Rewarding employees for their hard work is a great way to incentivize performance and motivate workers to continue producing high-quality results.
  3. Provide memorable employee experience: Giving employees prepaid incentive cards helps create a unique and memorable experience that will stay with them for years to come.
  4. Increase brand awareness: Companies can use reloadable prepaid debit cards to promote their brand and spread awareness among employees and customers alike.
  5. Flexible usage: Reloadable debit cards offer flexibility when it comes to usage – they can be used for a variety of purchases, including online shopping and in-store transactions.

Reloadable Debit Cards FAQs

Q: Do these cards come with any type of insurance?

A: Yes, almost all prepaid reloadable debit cards carry one of two insurance coverages, either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) insurance. The funds will be held in a pooled account, and if the backing bank fails, you’ll be able to redeem your money. Reloadable debit card issuers must inform you whether your money is insured before you buy their card.

Q: Are reloadable debit cards better than gift cards for my employees?

A: While gift cards are always welcome, we think that reloadable debit cards are just as strong plus, they have the extra benefit of not getting thrown away when the gift value has been spent, as the card will be reloaded as soon as the employee earns more incentive rewards.

Reloadable Debit Card FAQ

Many of today’s savvy business leaders are looking for a fully-managed incentive program. We make it easy by effectively becoming your Program HQ.

With these business models, your only responsibility is choosing the rewards and paying the invoices. Our team members handle the rest, from customer service to submission verification, to 1099 tax reporting.

Legal and tax advisors are also available to assist in setup and periodic rule changes. If you’ve been looking for a solution that doesn’t require additional headcount, look no further than Level 6.

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