Debit & Prepaid

Wilson Farms Introduces Multiple-Reward ACH Debit Card

Wilson Farms last week launched the Red Hot Rewards PIN-debit card, a payments/loyalty product that settles transactions over the automated clearinghouse network and provides various incentive rewards to the food and gasoline store’s participating customers.

Maverick Network Solutions Inc. is partnering with the Williamsville, N.Y.-based merchant to deliver the debit card and cash-back rewards cardholders can earn. Maverick also is the card processor, handling authorization requests and settling the transactions.

“This product is a private-label debit card specifically designed for Wilson Farms, with the PIN-based element making it highly secure,” Phil Valvardi, CEO of Wilmington, Del.-based alternative payment services company, tells PaymentsSource.

Wilson Farms also is partnering with Norfolk, Va.-based loyalty-services provider Outsite Networks Inc. Outsite Networks will provide customers with additional cash-back incentives, target offers and other rewards, such as buy-one, get-one-free offers on beverages and $1-off coupons on various groceries, according to a news release announcing the product.

Representatives from Wilson Farms and Outsite Networks were unavailable to comment about the initiative by PaymentsSource’s deadline.

Because Wilson Farms is using Mavericks’ private-label card, the company avoids paying bankcard interchange. “It also appeals to merchants because there is no modification to their current system. It is basically plug and play,” Valvardi says, noting Wilson Farms can use the savings toward a loyalty and rewards program.

As the processor and card manager, Maverick’s main expenses include the cost of the cards and marketing, such as in-store and radio ads and e-mail blasts, Valvardi explains. Maverick generates some revenue through a per-transaction fee, which Valvardi says is 50% to 75% less than traditional card fees.

Wilson Farms is experiencing a lift in sales and reduced expenses to process transactions and is seeing its transaction size double both in store and at the pump when customers pay with the debit function of the Red Hot Rewards card, Valvardi adds.

Specifically, “Maverick, Wilson Farms and Outsite review the transaction volume on different payment types and compare sales with the debit function of the Red Hot Rewards card to non-Red Hot Rewards debit sales,” he explains. Furthermore, Wilson Farms “proactively reviews the transaction data to ensure that the ACH product is reducing its transaction expenses and increasing sales,” Valvardi notes.

Similar to loyalty cards other grocery store chains offer, Wilson Farms’ loyalty card enables customers to save money on various sundries. Cardholders just need to link their existing or new loyalty card to their checking accounts by enrolling the bank-routing and account information from a personal check. The entire registration can be done on the Wilson Farms Web site.

Consumers who choose to use the loyalty card as a debit card may to participate in the cash-back promotion, an added benefit not part of the regular loyalty card.

Similar to Royal Dutch Shell PLC’s Shell Saver Card (see story) http://www.paymentssource.com/news/first-data-ach-product-has-market-2670961-1.html, consumers may use the Red Hot Rewards card only at the merchant’s stores. Consumers may use either use a key tag or card to initiate purchases, and they earn 20 points per dollar spent inside the store and 10 points per fuel gallon purchased. Customers also may check their points and print coupons at printers located inside Wilson Farms stores.

To entice customers to link the card to a checking account, Wilson Farms is offering 500 points for activating the debit function and double points when using the card to purchase fuel from the pump. The card also enables customers to earn free and discounted products and 5% cash back on both fuel and nonfuel purchases through March 31, according to a news release announcing the initiative.

“Wilson Farms plans to evaluate the cash-back program in mid-March and will then decide if the program will continue and at what percent,” Vilvardi says.

The points earned with a card are separate from the cash-back incentive. Once customers acquire 500 points, they are eligible for monthly rewards such as a free 20-ounce beverage. Consumers also can earn club rewards, which enable them to buy a certain amount of products such as eggs, milk or coffee and eventually get one free. The transaction rewards enable customers to buy a specific product such as crackers and receive a coupon good toward their next purchase.

ACH-based cards, such as the Red Hot Rewards card, seem to have staying power because of the growing traction in the convenient-store and petroleum space, Valvardi says. Moreover, “these types of merchants are continuously looking for ways to build loyalty and cut operating costs,” he adds.

One observer agrees, to a point. “The main question is whether consumers really want to use a single-branded card for [every place they shop],” says Beth Robertson, director of payments research at Pleasanton, Calif.-based research and strategic consulting company Javelin Strategy & Research. “Ultimately, it depends on what incentives are offered. But at the same time, when are the rewards not enough to entice consumers?”

Meantime, cards such as this are good because they drive loyalty and help merchants control expenses, Robertson adds.