Grocery cashiers are now scanning shoppers' hole-punched plastic key fobs before scanning their crackers, and the same trend applies to drugstores, bookstores, hotels and many other businesses. Customer-loyalty programs are a major reason plastics business is booming. Firms want repeat customers, and customers want rewards-plastic cards help both sides.

The popularity of membership, loyalty and gift cards have attracted more distributors to the plastic products market, which typically yields better margins than forms. "Plastic cards are becoming much more popular with distributors and their customers," says Damon Smith, president of Prism Business Graphics, a distributorship in Dallas that sells plastic cards to firms in the hospitality industry. "Plastic cards are a great way for end users to identify and distinguish themselves. I know I'm more apt to go to a restaurant or hotel or other business that offers a reward program."

Smith is not alone. According to Standard Register's 2000 National Consumer Survey of Plastic Card Usage, 41 percent of buyers said loyalty benefits influenced where they shopped, a 5 percent increase over 1999. Forty-three percent of buyers who had loyalty cards said they shopped more often at retailers whose loyalty cards they owned. The number of participating households in frequent-shopper programs has doubled over the last four years, according to research firm AC Nielsen.

"It's a fast-moving market," Smith says. "It's getting more competitive, but not as competitive as business for letterhead or envelopes, where there's a shop on every corner that can offer those products. Distributors need to understand the benefits and selling opportunities before they can succeed."

The Right Technology
Plastic products are more durable than paper ones, and that's why image-conscious companies tend to prefer them. They come in a variety of shapes and sizes. Thin, 10 mil plastic cards attached to carrier sheets are used frequently by customers who want to personalize the cards in-house using laser printers. Thicker, 30 mil credit card-style cards are ideal for clients that seek durability and a more distinguished look.

One main advantage of plastic cards is they can be encoded with magnetic stripes, enabling firms to track customer information. The concept of loyalty has paved the way for customer relationship management software, which enable firms to capture and analyze information such as purchasing behavior and buying history. Cards with magnetic stripes pull this data together when it matters most-during the transaction.

Gift cards with magnetic stripes are some of the hottest cards on the market because they can be used repeatedly until entire card amounts are spent. Stores don't have to refund cash, as they often do with paper certificates. Plus, the cards are durable and more easily carried by shoppers.

Another way to turn plastic cards into information trackers is to include bar codes. Smith says more of his clients are using thermal-imaged cards with personalized bar codes. One of them, a dry cleaning company, issues bar coded tickets to customers who drop off clothes. The tickets include numbers that help employees locate the clothes when customers return. Smith suggested that the company also offer 30 mil plastic bar coded cards with unique customer ID numbers. Employees now scan the cards and pull clothes from the rack more quickly and accurately, Smith says. "Just as important," he says, "customers now keep a reminder of the dry cleaner with them constantly. It's an effective advertising tool."

Plastic cards account for approximately 35 percent of business at Prism Business Graphics. "It's our No. 1 niche," says Smith, who also sells employee ID cards and time cards to restaurants and hotels. "Loyalty programs work both ways," he says. "Their customers keep coming back, and they're loyal to our distributorship. We've done business with a lot of our clients for 10 years."

The Right Targets
Good targets for plastic products include banks, video rental stores, insurance companies, grocery stores, travel clubs, alumniand trade associations, unions, car rental firms, universities, and sports teams. Reprinted with permission from Print Solutions Magazine, published by the Document Management Industries Association.