Mooncakes have been the most popular product for voucher givers, seen as a convenient alternative to handing out dozens heavy boxes during the Mid-Autumn Festival. (Photo/CFP)
The use of Pre-paid vouchers has become increasingly popular in China, to the extent that it is now seen as the primary way to give gifts.
Beijing Business Today reported that crackdowns on pre-paid cards by seven of the country's ministries, including the Ministry of Commerce, have caused a huge impact on their issuance and use. In spite of this, various vouchers not subjected to legal supervision have become a hit.
Pre-paid vouchers are similar to shopping cards, both of which are used for making purchases at full price. A small discount is offered if vouchers are used by companies or groups to purchase large quantities of a product. For instance, a 10% discount is offered on a purchase using 30 vouchers at a face value of 398 yuan (US$62.60) each for Haagen Dazs mooncakes.
"My holidays have been dominated by these vouchers," said a female shopper surnamed Ye. She told the newspaper that vouchers have replaced shopping cards as the main medium of giving and receiving gifts during holidays and festivals.
A Beijing Business Today reporter found in an on-the-spot investigation that vouchers now account for a large share of the sales of a business. About 70% of the purchases of Chinese mitten crabs from the renowned Yangcheng lake, for example, were made using gift vouchers. A crab seller at a Beijing market said about 20,000 vouchers worth 50 million yuan (US$7.86 million) were sold in Beijing this year, 20% higher than last year.
Vouchers for mooncakes have proved to be the most popular, with nearly all mooncakes being purchased using gift vouchers throughout this year's Mid-Autumn Festival, or Moon Festival.
The issuing of vouchers allows manufacturers to be paid first and produce later. Since most pre-paid vouchers are designed for designated products, businesses are able to manage their products accordingly.
Liu Hui, an industry expert, said gift cards give consumers more choice than vouchers because they can be used to buy discount or inexpensive products. Vouchers by contrast are usually used for expensive or highly profitable products, allowing businesses to guarantee their profit margins.
Moreover, tight deadlines allow businesses to gain from unclaimed vouchers. An estimated 15%-20% of Chinese mitten crab vouchers handed out in Beijing are not redeemed in time each year, adding up to about 10 million yuan (US$1.57 million) in value.
While pre-paid vouchers have enjoyed booming demand, the benefits gained from them do not live up to their popularity, particularly in delivery, Ye said.