TIGARD, Ore. -- Numerous independent retailers in the Pacific Northwest last month began rolling out a new co-branded prepaid phone card.
Some 40 to 50 independents using the Western Family controlled label as their store brand now offer phone cards with the MCI and Western Family logos.
As many as 500 retailers in the Western Family network are expected to eventually offer the 15-, 33-, 70- and 180-minute cards, which are priced at $5, $10, 20 and $50, respectively.
"The MCI name is well known and easily recognized, and the company advertises nationally," said Chris Duley, vice president and general manager at McKenzie Buying Co., a wholly-owned subsidiary of Western Family here.
Under the new prepaid-card program, retailers order whatever denominations work best in their area. "A retailer can order all 15- and 33-minute cards, as well as 70- and 180-minute cards too," he said. The retailers J-hook two-and-a-half-inch by six-inch dummy cards, representing the various denominations, at the front end. Customers exchange them at the checkstand for live cards.
Duley said sometime next year retailers will begin displaying point-of-sale-activated phone cards at various locations throughout the store, a move that has been recommended by Western Family and should trigger higher sales.
Crucial areas are "greeting cards, especially at Mother's Day or Father's Day, back-to-school areas and travel sections where travel-size toothpaste and shampoo is stocked, with film," Duley said. The phone cards will also be J-hooked or clip-stripped at other displays, he said.
Directly supplied by Western Family, the private-label prepaid cards carry retail margins ranging from the high 20s to the low 30s.
The new Western Family prepaid card replaces a program the supplier offered retailers through their grocery wholesalers -- Associated Grocers, Seattle; United Grocers, Portland, Ore.; URM Stores, Spokane, Wash.; or Associated Food Stores, Salt Lake City.
Before, cards were shipped live to stores and kept in cash registers, removed only when shoppers asked for them. "The only thing that generated sales was POS materials like danglers. If customers saw the Western Family phone card was available, they had to ask for it at the checkouts," Duley said.
Now, Duley explained, there is "supplier support in POS materials like posters, door signs and register stickers, which makes the program more noticeable at store level."
Phone card sales, which have done well among Western Family-affiliated independents, are projected to grow to one-and-a-half cards per checkout per day, from about half a card under the former program.
Duley envisions growing phone card sales beyond the customer base that now accounts for the bulk of sales -- namely, low-income families.
"As the industry matures in the future," Duley said, "more people will become aware of the benefits, and these cards will eventually migrate to higher-income areas."
