PREPAID PHONE CARDS ROLLING OUT AT BIG V

JOEL ELSON

FLORIDA, N.Y. -- Big V ShopRite here is expanding a program of prepaid telephone cards dispensed from vending machines to all of its 31 stores following a two-month test that demonstrated the product's profitability and consumer acceptance.

Prepaid telephone calling cards allow users to purchase telephone time in advance and to use the cards instead of depositing cash in public telephones. The cards are thrown away after their value is used up. The retailer earns 25% profit on sales of the prepaid cards. At Big V's test stores, weekly revenue has averaged $200 to $250 per store, said Dominick Guarneri, director of general merchandise and health and beauty care. "We're very excited about prepaid phone cards. There's no upfront investment in product or equipment," Guarneri added.

Big V is testing two prepaid phone card systems, one from Interurbain Communications, Pompton Plains, N.J., and another from AmeritalkTelecom, Morristown, N.J.

According to Arthur Freedberg, Interurbain's president, Food Circus Supermarkets, Middletown, N.J., also has prepaid phone card dispensing machines at three of its stores.

Big V plans to have prepaid telephone card machines throughout the chain by mid-November, in time for the holiday season.

The retailer anticipates weekly volume of prepaid phone cards eventually will grow to $500 to $600 per store with consumer's greater awareness of the product and its convenience. Store managers service the vending units monthly by replenishing the cards and forwarding receipts to the chain's main office. "It's a very clean program with hardly any labor involved. You simply plug in the vending machine," said Guarneri.

The freestanding card dispensers, which

ers, which are 2 feet wide and 12 inches deep, are being merchandised at the courtesy counter. Guarneri said prepaid phone cards could be appropriately promoted at greeting card departments. The cards, which are merchandised in predetermined $5, $10 and $20 call values, are purchased by inserting the exact cash denomination in the dispensing unit, which reads the bill and issues a card in the set amount with a personal identification number. To use the cards, a caller dials a toll-free 800 number and is told to enter the PIN number. The caller is then told the time left on the card, and then the call is put through. The retailer has found the phone cards are particularly popular in college towns and in ethnic markets.

"Our major volume area for these cards has been in New Paltz, N.Y., which is a college town. Prepaid phone cards also do exceedingly well in Yonkers, N.Y., where we cater to a large concentration of Hispanic and African-American consumers," said the retailer. Guarneri sees prepaid phone cards as a product of the future.

"It's perfect for people who don't have a telephone company calling card and who make a lot of calls away from home, or for those that don't have access to a long-distance carrier," he added. The chain's co-op wholesaler, Wakefern Food Corp., Elizabeth, N.J., is working on developing a ShopRite private-label prepaid phone card. The card would carry the ShopRite logo, customized ads and a thank you for shopping at ShopRite when the 800 number has been dialed.