Do consumers really take advantage of those rewards that retailers offer to frequent shoppers? In the case of store gift certificates offered to private label charge card holders, the answer is apparently a resounding “yes.”
A recent study of consumer buying habits by Shoppers Charge Accounts Co. (SCA), found that 88% of all gift certificates mailed under its Prestige Points rewards program were redeemed. Moreover, the frequent shopper gift certificate program spurred the cardholders to increase their spending by an additional 48%. In effect, a gift certificate-holding customer will spend an average of $148 for every $100 of the certificate’s face value, the study reported.
The six-month study involved 30 SCA merchants operating more than 200 stores. With SCA’s Prestige Points frequent shopper program, free gift certificates are mailed to cardholders when their charged purchases at the participating merchant reach designated dollar values.
“This is a ‘win-win’ situation for customers and retailers alike,” said Ed Fechner, senior vice president of Mahwah, N.J.-based SCA, which administers private label charge card programs for chain and independent retailers nationwide. “Customers benefit by receiving a valuable gift certificate while retailers find such programs generate additional sales and traffic. Cardholders have an incentive to shop at the store to earn points towards the reward. Then, when returning to buy goods with the gift certificate, these customers’ purchases exceed the certificate’s face value.
SCA is a division of the Hudson United Bank subsidiary of HUBCO (Nasdaq: HUBC), a New Jersey-based bank company. HUBCO currently operates a total of 85 branches in New Jersey and Connecticut with assets exceeding $3 billion.Details