Filling the Plastic Gap

Home foreclosures, maxed-out credit cards and high banking fees continue to affect consumers across the board, but these factors are especially taking their toll on people who are unbanked or under-banked. This demographic is one that seeks out alternative payment methods, and Dollar General is working toward responding to their demand.

There are 73 million unbanked and under-banked consumers in the United States, according to data from Wal-Mart Stores. There are countless others who carry maxed-out credit cards and live day-to-day on a cash basis without access to a banking service. Dollar General hopes to ease this pain and fill this “plastic gap” by offering its shoppers a reloadable prepaid card.

In December, Dollar General introduced its Discover Network Reloadable Prepaid Card, from Tampa, Fla.-based financial services company and card solutions provider nFinanSe. The card, which can be purchased and reloaded in more than 9,000 nationwide stores, can also be used to buy goods and services across all of Dollar General’s shopping channels, as well as at other chains that accept payment cards using the Discover Network.

“We wanted to offer consumers a low-cost payment alternative to help them meet their shopping needs,” said Tawn Earnest, senior director of corporate communications for Dollar General.

Dollar General achieved its goal by marketing its prepaid card as a “walking bank account.” Cardholders can use the cards to make purchases at retail stores and online, as well as get cash back at retail stores and ATMs.

The cardholder can log onto the nFinanSe Web site by entering their card and PIN number to give them access to their transaction history and the ability to transfer money from their card to a checking or savings account.

The card also includes free customer service provided by nFinanSe. As shoppers register for the card, they qualify for a free replacement card upon its expiration. The cards are active for 36 months from the time they are printed; if an active card expires, nFinanSe will issue a new card.

Cardholders can also opt in to receive e-mails or text messages on their cell phones that report real-time transaction and balance information.

Dollar General sells the cards for $5.95, and each carries a monthly maintenance fee of $2.95. While the card requires a $2.95 fee for all reloads, it does not apply any dormancy fees if the card goes unused. Each registered card caps maximum daily loads at $950. The maximum total card value is $5,000.

Besides expanding the Dollar General brand, the program also helps the chain build customer loyalty, as cardholders will begin to consider the chain a destination when reloading the card, Earnest said.