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test As cost per minute has dropped, it has become necessary to cut costs, and we have seen a tendency to go to paper cards, especially hang tags.

test Security continues to be of utmost importance in retail packaging solutions.

test Printing and packaging are market-driven industries, the ability to provide a quick turnaround is vital.

test The concern for security also extends to inventory control, and customers request batching and barcoded labels that can be wanded for inventory counts.


Market to Market!

Phone Card Printing > Articles > Market to Market

Printing and packaging- two words that seem simple enough but represent more than ink on plastic and on how a card is displayed at retail.

market to Market Printing involves planning, artwork, and graphic design, prepress and quality control of the actual printing process in order to attain excellence of the finished product.

Packaging encompasses three phases: retail display packing; bundling for individual stores, which increasingly includes inventory and security control; and pallet shipping of orders that can range up to 3 million units.

According to The International Card Manufacturers' Association (ICMA), more than 6 billion cards were manufactured in 1998, with nearly half manufactured in North America. ICMA reports that the overall market represents $1.4 billion in U.S. dollars, and by 2002, the volume is expected to reach 9 billion cards, of which 3.8 billion will be smart cards. An estimated 1.2 billion smart cards are now in circulation, and 80 percent of these are phone cards (

Printing and packaging houses are experiencing this volume and have seen changes implemented over the past year. Many are already lining up exciting new products to meet demands. Experts we spoke with agree that were five years ago a large run of prepaid phone cards was 5,000 or 10,000, today's large runs are 100,000 to 500,000. In 1999, producers noticed that the quantity of cards in an order had increased from 25 percent to 100 percent across the board.

"Changes have taken place in three areas of prepaid card printing and packaging," according to Gordon M. Kramer, president and CEO of Continental Plastic Card, and a ICMA board member. "As cost per minute has dropped, it has become necessary to cut costs, and we have seen a tendency to go to paper cards, especially hang tags, which affects packaging. Where a decision has been made to stick to plastic, then the placement of the mag stripe is changed to facilitate activation. And we are seeing a change in wrapping. More often we see card individually wrapped in cellophane, which increases the level of security."

On the subject of smart cards, Kramer cautions that the cost of these stored value cards is often prohibitive in the prepaid market, "A chip card run up to $5, whereas a mag stripe can be as low as 7 cents," he says. "And this does not address the costs of changing readers or communication software.

Not only do we see very few chip cards in the North America phone card market, but we are actually seeing Europe switch over to mag remote value cards like we have in the U.S. Although there is no doubt chip cards are coming, they require a different production technique, and it will be a long time before they are proliferated in the United States."

Price, Speed and Security.

"Packaging is a good barometer of the industry," according to Gerald L. Blight, vice president of In Tech Direct Inc., a card finishing house. "And there is a lot of packaging to be done. As a general trade, we have seen order sizes increase 25 to 50 percent and, whereas an order for one million units was considered large a few years ago, today it is becoming more commonplace."

Reflecting on the current trends in prepaid phone cards, Blight observes a gradual switch from the cash-drawer phone card to rigid board packaging. Retailers prefer the rigid board because it offers a 41/2 x 6 inch billboard that effectively competes with other impulse items hanging from j-hooks, and the cards are activated only upon purchase. "In retail marketing situations where the 'fast scan'- which measured to be about 1.4 seconds- is considered the window of opportunity, this type of packaging has proven to be an excellent means of attracting retail dollars," Blight says.

A banner sign often advertised POP flexible packaged phone cards, which customers could then request from the cashier in the point-of -purchase (POP) retail segment.

Retail packaging demands show a strong increase and as a trade house, InTech Direct finds an increasing need for personalization of services. Security continues to be of utmost importance in retail packaging solutions, and clients appear willing to spend a little more money on security factors. For instance, a corporation with 800 stores will want packets of so many cards bundled and dropped off to each individual store and then require a follow-up report for inventory information.

As prepaids have crossed over into areas of loyalty, memberships and gift cards, Blight is pleased to see retail purchasing agents become increasingly sophisticated, "When decision makers become well versed about available options and specification, they are in the position to demand quality, and this only enhances the market."

"Price, price and price are the driving factors of the printing and packaging market," according to Steven Cinnante, vice president of operations, Ameriplast.

"Customers are concerned with price and this means that shipping charges are big issues." Printing and packaging are market-driven industries, which makes the business very competitive and, while price is often the bottom line, the ability to provide a quick turnaround is vital. At the same time, security has become increasingly important, and customers increasingly understand the need to pay for security control. For all of these reasons, printing and packaging processes are blended, and the entire process often takes place in-house, under one roof.

Controlling the product from the beginning to end.

In-house production is popular with houses that specialize in printing and packaging because it keeps control of the product. Delivery time stays in hand of the printer/packager and this means that turnaround time is decreased because time is not spent outsourcing. As per-minute rates fluctuate in the marketplace, what is competitive one month is not even sellable the next month. This places enormous importance on how fast the product is delivered

Jeffrey Hedge of Hedge Creative reinforces this trend. "Turnaround time continues to be a big issue. Last year, an important industry change took place with the introduction of the three-day turnaround. Now everybody in the industry is using this concept, and we are printing, PINning and shipping in three days. The practice of taking two or three weeks is a thing in the past. "And as we work faster, we are also producing and controlling more aspects of the total product. For instance, all of our work is done in-house. We can take a client's concept sketched on a napkin, come up with the artwork and design, do the prepress, print the card, package the cards and go so far as to drop ship to multiple locations. But our role is still not finished. We have set up a system where our distribution center calls once a week and handles inventory telemarketing distribution."

New solutions for a growing market.

Although the blister pack was the first packaging standard for prepaid cards, Cinnante is seeing a shift. "Before we only did overwrap and blister packaging, but now the market has demanded our expansion into other mediums. For instance, paper hangtags have become popular and are actually the mainstay of the market. And, again, security demands have seen hangtags produced two ways," says Cinnante.

"Some customers require hangtags in flat packs consisting of 10 mil styrene cards that are individually overwrapped for security. Increasingly popular is the swipe pack. This point-of -purchase card is generally a standard 30-mil PVC mag stripe card presented on a billboard carrier for retail purposes. The card is either glued or wrapped to the carrier. This same format is also made in a 24-mil styrene product with a mag stripe that is enclosed and presented as a swipe card. The customer selects the card and brings it to the cash register where it is activated for use. The retailer is protected because if the card is stolen prior to activation, it is worthless."

The concern for security also extends to inventory control, and customers request batching and barcoded labels that can be wanded for inventory counts. A batch of 12 or 50 will be given a bar code, which is entered into inventory before being shipped. Cinannte has seen public understanding lead to acceptance of the prepaid market, and he measures success by the numbers of reorders. "Where orders used to run 5,000 0r 10,000, the stabilization of the phone card market means that orders start with 50,000, and if successful, a reorder of 200,000 or 300,000 is not uncommon," he says.

"Corporate acceptance of the medium means that large corporations, such as Walgreen's, Exxon, Target and Circle-K want their images branded on cards. Not only do they want enough for all their stores, but they need them batched and bar-coded."

Lynn Weiss, sales and marketing manager for Brookdale Plastics, observes the retailers are looking for one-stop shopping, " Warehouse and big-box companies want the pallet program. More and more of these big retailers just want to accept delivery from the truck, take the lid off and sell it. My intuition tells me that large store retailers will follow suit with this philosophy.

"The other trend I'm seeing with warehouse retailers is based on the concept that bigger is better when it comes to the size of packaging. Eyecatching and security are both factors in contract packaging and fulfillment, and we've expanded our stock line to give customers what they need."

Satisfying customer demand.

"Bring us something new, is what our customers tell us and that's what we do," says Hedge. "The challenge right now is packaging. The retail trend is switching from PIN-based to point-of -scale activation, and we find our challenge is not just in producing something new, but presenting it to our clients faster and more cost effectively."

"In February we will introduce and launch a revolutionary retail package where the card and packaging are produced all in a line, which has never been done before. One press will do everything: print the card, print the packaging and merge the two together. We expect to produce half a million pieces a day and at this point, nobody comes close to the capacity."

Hedge believes lenticular cards will be hot in 2000. "A new first-quarter product for us will be gang-run lenticular cards. These cards are very effective because customers hold on to them longer than other cards. However, since lenticulars are usually produced in runs of 100,000, what we plan to do is gang run orders of 5,000 or 10,000 for a lot of different customers on one press run. Everybody gets the advantage of a price break- which will lower consumer costs."

It's clear that printing and packaging companies have met challenges from the fast-changing prepaid market and along the way have fortified their capabilities to meet the future. Hedge is upbeat. "My forecast for the printing and packaging industry is that phone cards are not going away- they are here to stay- and this means that printing and packaging is only expected to get bigger."

More Articles >
Understanding The Basics | Phone Card Design | The Fine Art of Color Proofing | Distributors and Private Labeling |
The Printing Battle: Plastic vs. Paper


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