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Online voucher schemes really took off in the late nineties. Since then issues such as security and redemption levels have in part been addressed as consumers gained more confidence in buying online.

But for many suppliers, it is still an uphill struggle trying to persuade prospective clients to tread the online path.

Below, a number of voucher suppliers address some of the common worries that clients face when considering the online option.

What are the benefits of using online vouchers?

Running a scheme online takes away much of the hassle that can come with a paper-based voucher scheme. "Online, you can make delivery so much quicker and essentially it delivers in a completely different way, says Sean Langley, operations director at TLC.

You can also reach a large target audience and the timescale for campaigns can often be shortened because there's no need for postage, handling or fulfillment. "This, in turn, means that online schemes can often prove more cost-effective than off-line, says Langley.

Ease of use is also a benefit according to Patrik Oqvist, head of marketing at Air Miles.

"On the collections side, online vouchers are a boon in terms of ease of use for both the customer and for the company running the online scheme, automatic transfer of points or vouchers, he says.

Can a voucher be sent through SMS and e-mail as well as via the internet?

In short, yes. "A voucher can be sent by any form of digital communication and can also be online-to-online, says Rick Brownlow, business development manager, new media, at PIMS-SCA.

The company has been working with CD e-tailer CD-Wow to produce an online voucher that can be used for third-party promotions. For example, a competition on a website may feature runners-up prizes of CDs from CD-Wow. Winners would be issued with the voucher for CD-Wow.

How secure are online vouchers?

This has been a major issue that all suppliers have had to address, but dealing online has gradually become safer.

"It's still a concern and no scheme is ever going to be entirely foolproof, but we're trying to be proactive and ensure that clients' worries are addressed, says TLC's Langley. Tools such as encrypted connections between browser and server, as well as unique codes used on the vouchers, have made headway towards ensuring online voucher security. Capital Incentive's online arm, Capital-E, has been running an internet-based dealers' staff motivation scheme for Inchape Retail. "There is no commercially sensitive or personal data, only input of a first name and a surname which is password protected and allows participants to view results, says Graham Povey, managing director at Capital Incentives

How can I personalise a voucher for a gift if it is electronic?

Many online voucher suppliers have a facility on-site to type in a personalised message to the voucher recipient. "When you personalise a message it also appears on the confirmation letter, which is sent directly to the purchaser, says The World's Your Oyster managing director Colin George. "They just hand the letter to the recipient and reveal the user name and password, and the recipient is then free to make a purchase."

Is online redemption common?

Online redemption of vouchers in simple transactions, such as buying CDs or toasters for example, has become very common over the last five years, as virtual currencies have only two real options - online redemption or the call centre.

But when it comes to more complicated transactions, such as an individually tailored city break with flight, hotel and car hire, for example, the voucher industry is still only just getting on track.

Air Miles is looking at expanding its whole redemption process of online booking to other areas, working towards tailored online solutions to match individual customer requirements, where relevant.

"Currently you can redeem miles on things such as days out in the UK, dining vouchers, and theme park tickets, but expanding in this way is the logical move, says Air Miles' Oqvist.

Do recipients want to redeem online?

This is a difficult one to pinpoint, since no one wants to give a straight answer.

According to Capital Incentives' Povey, the most important benefit of online schemes is not the reward or its redemption, but the up-to-date nature of the communication "at your finger tips and the ease and efficiency of the scheme.

He points out that a high number of recipients still want to redeem their vouchers on the high street and spend time browsing personally in their chosen retail outlets rather than selecting their rewards online. "The 'touchy-feely' aspects of vouchers will always be appealing as the recipient feels they have actually gained a reward of a perceived value and enjoys the personal presentation.

Online voucher redemption is in many ways still very limited and seriously needs to be addressed and evaluated if it is to become a common choice, concludes Povey.

CASE STUDY - TISCALI

European internet service provider Tiscali called on the services of TLC to develop and implement a campaign which would generate new subscribers, encourage website use and repeat visits for Tiscali, as well as delivering all rewards electronically.

Digital delivery

Tiscali decided to offer TLC's £50 Virgin holiday vouchers. All new Tiscali customers were rewarded with a £50 Virgin voucher when they signed up with the ISP.

A further £50 voucher was then awarded if the new customer chose to use Tiscali to connect to the internet within 14 days of registering online. And finally, for every subsequent 180 minutes a customer spent online, Tiscali would e-mail a further £50 worth of vouchers, to a maximum value of £300.

Tiscali used www.myinstantreward.com, TLC's online digital delivery system. This allowed vouchers to be sent via e-mail to all of its subscribers, resulting in significant savings in handling, fulfillment and postage costs.

According to the client, the campaign exceeded all expectations, and during a period of six weeks created 20 per cent of all Tiscali's online registrations.