Credit Cards & Value Add
The Charlotte Observer writes about kiosks that allow shoppers to receive custom coupons by scanning their loyalty card as they enter the store. The coupons could be tailored to the purchasing patterns of the card holder. Why are these services not being offered by the credit card networks to merchants?
Aneace Haddad has written about this a lot over on his excellent blog. Credit card networks are, or will be, challenged to justify ever increasing interchange fees, and offering value add services to merchants is one way to do this. What jumps out at me in this story are two things:
- Many merchants do not have a loyalty card program (e.g. not large enough to warrant the investment), but do accept credit cards.
- Even if a merchant does have a loyalty card program, it can only base the targetted marketing/advertising based on the purchasing behaviour at that one single store.
Think of how much data the credit card network is sitting on that could benefit the merchant.
Another benefit for merchants is that even occasional customers use general purpose credit or debit cards, whereas loyalty cards are only used by already loyal customers. So merchants can target special promotions to occasional customers that pay with a credit or debit card, for example by offering a promotion only to people who have not been to the store in a long time. That would be impossible with a store loyalty card, since by definition a customer that goes to the trouble of pulling out a loyalty card is already pretty much a loyal customer. Thanks for the link to my blog!