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The Independent has recently been very generous to consumers who sign up for a six-month subscription to the newspaper, handing over £100 in John Lewis vouchers to anyone who takes up the deal.

The gift-card and voucher sector, which is worth £4bn a year, has been holding up fairly well despite the downturn, because many brands have realised that they need to offer cash-strapped consumers something extra. Vouchers are an ideal way to add value to their products and services.

The Independent is just one brand that is opting to run joint promotions with voucher providers. According to Ciara Battigan, the newspaper's marketing manager, the campaign has achieved its aims.

'In the current economic climate, John Lewis vouchers appeal to everyone because it is a department store. The high reward was justified because we were asking people to sign up for at least six months,' explains Battigan. 'It increases the frequency of purchase as people get the paper every day, rather than once or twice a week, and this produces some hard figures that advertisers can work with.'

Similarly, News International is giving a £25 Marks & Spencer voucher to anyone who commits to its £6-a-week subscription to The Times and The Sunday Times.

This is also the incentive of choice for Sky - the broadcaster has been offering £50 in M&S vouchers to anyone who convinces a friend to sign up. An additional online offer of £25 to spend at Tesco is available to those who take Sky with sports, movies and Sky+HD.

Online office supplier Euroffice is rewarding its customers with a £20 HMV voucher when they spend more than £199, or a £10 voucher for orders of more than £109.

For retailers, this type of added-value deal can be extremely lucrative. At John Lewis, online redemption now represents more than 10% of all its voucher sales. Of those sales, more than half include an additional spend via a debit or credit card, as recipients spend some of their own money to augment their purchase. Moreover, the free exposure resulting from appearing in the pages and website of a national broadsheet such as The Independent are an additional benefit.

Changing consumer behaviour

'We are definitely getting more enquiries from brands that want to use our vouchers to drive or change customer behaviour,' says Andrew Sellers, commercial development manager at John Lewis Direct. 'The car companies have started to come to us to encourage people to take test drives. This is something we have done with BMW.'

Brands now regard vouchers as an effective way to drive sales because it is an easy promotional mechanism to put into people's hands. 'The key thing is to think carefully about what a customer can get once they have the voucher,' he adds. 'Will they appreciate it and spend it? If not, it defeats the object.'

There is also plenty of evidence that retailers have been adding value to their own gift-card and voucher schemes. Debenhams, for example, offers refreshments in its restaurant, a personal shopper experience and a beauty consultation with its VIP Gift Card.

Elsewhere, Starbucks has been mailing a voucher for a complimentary cup of coffee to customers who sign up to its Starbucks Card Rewards scheme online. Sandwich-shop chain Pret A Manger has been running similar offers in an attempt to drive loyalty.

According to Andrew Johnson, director-general of the UK Gift Card & Voucher Association, there is room for brands and voucher-providers to add further value. He points out that, in the US, there have been improvements in the way vouchers are packaged, and these are only slowly being taken on in Europe.

'We are talking about gifts, so if someone is given £100 on a voucher, they want to feel that what they have been given has that kind of value,' says Johnson. 'Packaging in attractive tins and boxes makes such a difference. This is very important in the B2B sector, where you need to do more than just throw a voucher on someone's desk and say "Thanks".'

Harrods already packages its gift card, which can be loaded with up to £10,000, in a box tied up with ribbons.

Johnson also expects more brands from complementary sectors to join forces to create mutual added-value benefits, such as restaurants and cinemas or hotels and car-hire companies.

Marriott Hotels International is already doing this in the US, where it has teamed up with Hertz Rent-a-Car. There are plans to introduce a similar link in the UK next year. Consumers receive a $50 Hertz voucher with every Marriott Gift Card purchase of $150 or more. This partnership brought in $1m for the brands during a four-week period this summer.

'This is the value of two strong brands working together, and we hope to roll out the agreement around the world,' says Julian Bonnett, Marriott's sales and marketing manager, global incentives and gift vouchers. He says there are untapped opportunities to do similar deals with brands to boost the B2B voucher market.

'There is certainly room to link vouchers with travel brands to appeal to workers in Generations X and Y, who want individual travel rewards rather than group incentives,' Bonnett adds.

Incentivising employees

DIY retailer B&Q has been working for some time to have its vouchers and gift cards included in employee incentive schemes. It recently announced improvements to its programme in time for Christmas. Anyone with £100 on a gift card will be entered into a prize draw to win a B&Q kitchen. There will also be a booklet containing several different discounts across its 40,000-strong product range for gift cardholders.

'To really add value in a market led by discounts, we needed to focus on key seasons and customers,' says B&Q business services manager Arun Glendinning. 'The gift card, with these additional offers, draws attention to the brand. We are new to the B2B market and people need to realise our strength at Christmas. We stock trees and decorations, for instance, as well as gifts such as tools.'

The Voucher Shop buys vouchers worth £65m each year for the incentive programmes it offers. It is increasing marketing activity for its Flex Bank online programme, which adds value to employee-motivation schemes, mainly through the use of vouchers.

The scheme allows employees to purchase store vouchers at a discount through their monthly salary. They can then choose when to draw down on their account and redeem the vouchers - before Christmas, for example.

Kuljit Kaur, head of business development at The Voucher Shop, says supermarket vouchers have been particularly popular during the recession.

It is a common adage in marketing that the best time to spend money is during a recession. However, as consumers look to control their spending, the ability to add value to an existing product could mean the difference between success and failure.

REWARDING LOYALTY

Voucher providers are focusing on B2B

Historically, brand tie-ups with voucher providers have mainly been limited to consumer offers. However, reward schemes are gaining favour in the B2B sector.

Motivational and incentives specialist Grass Roots is boosting its B2B portfolio by negotiating added-value deals with entertainment and leisure brands through its subsidiary, Parallel Promotions.

The firm has offered its Bonusbond multi-store gift voucher since 1971, but Grass Roots' head of commercial operations, Francis Goss, suggests the B2B market is changing rapidly and employees expect more for their loyalty.

'You have to differentiate your vouchers by making them more appealing,' he says.

Companies buying Bonusbond vouchers now will be able to receive additional rewards, such as free cinema tickets or DVD rentals.

'People are buying a gift, so it makes sense to have an additional bonus. There is an emotional experience with a voucher, as there is with a leisure experience,' adds Goss. 'More organisations with a reward programme will migrate to vouchers if there is added value.'

He has also noted increased interest from the insurance sector, where firms have been offering vouchers rather than cash as an incentive to those staff promoting fresh products.

THE US EXPERIENCE

The immediacy of prepaid cards means this approach is eclipsing more cumbersome paper-based schemes

The adoption of electronic delivery is creating a shift in the US incentive industry. Falling consumer sales and a reliance on product rebates and discounts is prompting manufacturers and retailers to add value to the customer experience by offering custom-branded prepaid cards.

These are proving popular because they deliver rewards up to 10 times faster than paper vouchers, enabling the recipients to access the funds immediately.

'These cards were a competitive advantage for a few companies in an industry, but they are now becoming standard,' says Mark Harrington, head of strategic client delivery at Citi Prepaid Services. 'We are seeing this trend among providers in telecommunications, appliances, electronics and cable and internet services.'

Harrington cites the example of cooking and cleaning products manufacturer KitchenAid, a division of Whirlpool Corporation. It put an end to its 'cumbersome' paper-based system and adopted instead the KitchenAid Visa Rebate Card to reward loyal customers.

'The card creates more of a lasting impression on the consumer than paper vouchers and provides a compelling marketing tool for its retail partners,' says Harrington. KitchenAid has issued more than $3m in rebates to more than 80,000 card-holders.

According to Tamara Carlton, director of product strategy at American Express Incentive Services (AEIS), clients, cardholders and retailers are seeking more value from incentive programmes.

'Cardholders view prepaid rewards as very valuable in this economy,' she says. 'In fact, they may be one of the only options they have to splurge on themselves or their family. US merchants are offering new discounts and innovative loyalty platforms, but always need to spread that message to a broader audience.'

AEIS is focusing on well-known retail brands to push its multi-merchant DirectSpend programme. A choice of pre-paid plastic incentive products can be redeemed at selected retailers in the travel, petrol, shopping, home-improvement and leisure sectors.

US companies are also exploiting referral programmes to drive sales by providing added-value incentives to customers who refer new business.