The Use Of Branded Currency In Retail

Branded currency is nothing new. The retail sector has been using forms of internal currency for many years. What has changed is the trend towards a more integrated and mobile-friendly reward system. To stand out, retail stores have to create their own branded currency experiences, giving consumers extra value for money while encouraging customer loyalty and retention.

It was back in 2013, now more than 5 years ago, when the Harvard Business Review predicted a branded currency revolution. They pointed out that this type of currency, including gift cards, loyalty points, and coupons, represented around $165 billion in purchasing power. Since then, more businesses have adopted the use of branded currency as a marketing tool.

Types of Branded Currency

Casinos were actually an early example of businesses using branded currency. They have been using their own chips for centuries. Players swap cash for in-house currency, which can then be traded at the tables. The use of poker chips improved security and gameplay, but the real advantage was that people tend to spend them more freely.

The same is true of other forms of branded currency. One of the key advantages is the exclusivity. Once a voucher has been purchased, it can only be spent at a certain store or on a particular brand. If done effectively, branded currency creates a kind of closed-loop of spending within the company.

There are several types of branded currency:

Gift cards and vouchers – This is an amount of money, represented as a physical or digital voucher, which can only be spent on certain brands or in defined stores. This offer is very versatile and is used by many companies. Examples include iTunes gift cards or H&M store vouchers.

Coupons – They differ from gift cards in that they usually offer discounts or offers on very specific products, rather than across an entire brand or store. For example, a supermarket may give out a coupon for 2-4-1 on a particular fabric softener.

Loyalty points – Many stores have loyalty schemes which award points, cash credit to shop with, or air miles as is often the case with credit card companies. Retail store Boots have a generous loyalty campaign that awards 4p for every £1 spent. Nearly all supermarkets also have similar offers, where points can be traded for coupons or store credit.

Credit – Credit can be given out as a promotion, and is often used for giving refunds too. The credit can only be spent on products in a store.

Branded currency can offer several advantages other than straight-up sales. Take American restaurant chain Red Robin and their ‘Year of Yummm’ campaign. The company sold 10,000 packages at $99 each, and everyone who purchased a package received a $15 voucher per month for a total value of $180. This made the customer very happy with their extra purchasing power, but it also increased the monthly foot traffic, improved customer acquisition and served as an effective marketing strategy – all while still bringing in the profits.


The Digital Revolution



Retailers should be aware that the use of branded currency is rapidly evolving. There are, however, many problems with traditional coupons and gift cards.

Branded currency requires a lot of upkeep from the consumer. Individual deals have to be manually sorted, stored and used appropriately in store. This type of currency can also be very difficult to combine, and is easily lost. As much of 20 – 30% of branded currency goes unspent, making for a loss of tens of billions in consumer purchasing power.

What is required is an integrated approach to branded currency. Starbucks, known for their innovation, provide a working example. Their mobile app combines loyalty points, gift cards, mobile payments and promotions for an integrated branded currency experience. Consumers can collect ‘Stars’ which can be spent on purchases, and even redeem points earned from completing challenges.

Running all of your branded currency through a mobile app creates a user-friendly retail platform. This can be combined with social media, websites and other channels. With all gift cards, coupons and loyalty cards converging in one place, companies can better utilize branded currency as an integrated approach to marketing.


Latest issue

  • 1


  • 1

Latest windows:

  • 1


  • The changing definition of luxury +

    Read More
  • CES 2019: 5 Key Takeaways +

    Read More
  • Health & Beauty 2019: Educate, Play, Share +

    Read More
  • 1

Out & About

  • Art Basel Miami 2018: Highlights +

    Read More
  • Out & About: London Design Festival 2018 +

    Read More
  • Out & About: Retail Design Expo 2018 +

    Read More
  • 1


  • High-Street Retailers should cater for the elderly +

    Read More
  • The growth of franchises +

    Read More
  • Why Using Live Video Chat is Great for Customer Service +

    Read More
  • 1

Exclusive Q&A


Stephen Briars,
Creative Director,
The Conran Shop


Search Our Site



We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.

EU Cookie Directive Module Information