I uploaded a photo of an advertisement of a Sichuan restaurant onto Facebook (/jianshuo). They were advertising for cash deposit card. If you deposit money (pre-pay) into their card, they give you discount. There is nothing new about it.
However, the tricky part is the amount.
If you deposit 100,000 RMB, you can get 120,000 RMB worth of credit to buy dinner in that restaurant.
I didn’t make the mistake. That is 100,000 RMB, or roughly 15K USD, for dining card.
This is obviously not the highest amount. There are many other places offering card level higher than that. Because of the popularity of these card, I am convinced that many people buy it. What that means?
The first question to ask is, who buy it?
The second question, what for? Is it just for the discount? Not likely. People have all type of creative way to use that card. People may send it as gift (bribe or not), or people can expensive it at somebody else’s cost, or simply a business owner who need to frequently buy dinner for their client that uses up 100K RMB quickly just for meal.
That was interesting but weird! So much money! how could they even get it together!!! Many chinese are becoming rich i think!
I have worked as a marketing department in a so called high end F/B place ( good way to explain is all stuff there are expensive) for around one year, we leveraged cupon or deposit card or VIP card whatever very often. As one of the promotion way, the target audience is definately not straightforward for those who simply enjoy having dinner or drinks. Here are my answers based on my working experience to your Qs.
1. Who buy it?
A. A few of the customers with piles of money in their pocket will buy it, very small percentage.
B. As you know, in SH, there are a lot of private clubs, such as Cigar Club, Golf Club or Ferrari Club. The organizer of these club buy the card for their club members having fun together. Well, the money is from club members, just another way for A/A payment for dinner or drinks.
C. You have already mentioned for the third one, as a gift. Some of the company will buy it as a gift for their clients or those who are very helpful and useful :)
2. What for?
A. Advertising promotion. There is an old Chinese saying, ” Good wine need no bush ” ( 酒香不怕巷子深). In this highly comercial society, however, it won’t work out well anymore. So, these business owners need to figure out different juicy stories to shout out their place. Like this Sichuan food restaurant, I believe more people will get to know this place with your blog posted and maybe some others as well. or this card itsself will draw a lot people’s attention no matter who buy it.
B. Bribe gift. In an other words, invitation card.
C. Part of the payment to exchange something else. Such as it can be used as cash to exchange wine from dealers or ads from media agency.
15% off is too small a discount for a prepayment of 100k or more, also temptation for business owner to go default if the scheme becomes too successful, in a lot of places this sort of practice is regulated as financials or even deemed illegal.
Red Flag…be aware buyers of such type of cards”
1) It maybe a scam” merchants collect large sum of money upfront. If the business goes sour and close down or worse yet vanished, there’s no way to recooperate your money. It has happend too often to private clubs, fitness centers, massage parlors etc.
2) Fraud: Companies or employees buying these type of cards may submit the receipts for reimbursement. A smart and yet dishonest way to cheat the government or the employers.
Personally, I will never buy such large sum of prepaid cards.