Chase Simplifies Redemption Process For Its Amazon Rewards Card

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Until last month, there was little that was actually rewarding about the redemption process for JPMorgan Chase & Co.’s rewards credit card.

Cardholders previously could redeem points only after they accrued 2,500, and then they had to wait even longer to receive a physical gift certificate by mail to use on Amazon’s website. To get cash back, they had to wait to hit 5,000 points. Chase and recognized this as a pain point and have updated their back-end systems to allow cardholders to spend points as though they were cash (see story).

“The interest really was in removing sort of any and all barriers to accessing your rewards, and that really came to fruition by removing any minimum,” says Chris Conrad, Chase general manager of the Rewards Visa card. “Where previously it was $25 now it is a penny.”

A customer that has earned 1,553 points can use them to fund $15.53 of a purchase on The remainder can be paid with the credit card.

Customers “wanted easier access to their rewards,” Conrad says. “Some wanted a lower redemption hurdle. Some wanted the ability to use the rewards in any amount.”

Although not a new idea, paying with points is a rare feature among credit card rewards programs. Issuers, which are trying to grow loan balances, are likely to make it more widely available to push consumers to use their cards more frequently.

“I think redemption is a sticking point for a lot of people who … can’t really be bothered to deal with that process, so streamlining redemption will be appealing to them,” says Megan Bramlette, the director of knowledge management at the payments consulting firm Auriemma Consulting Group in New York.

The points-spending feature is enabled by’s platform, which allows cardholders to see their rewards points balance during the checkout process, Conrad says. Chase worked with its payments processing subsidiary, Chase Paymentech Solutions LLC, to integrate its existing software with’s system, Conrad says.

“We had to custom-build new infrastructure and new communication protocols into our core processing platform,” Conrad says. “We do view this as a form of tender analogous to a credit transaction, which I think is a very different point [from] normal rewards redemption” process.

Conrad adds that the system also needed to handle activities like reversals and disputes “in a very analogous way to other forms of tender.”

A spokesperson for would not comment for this story or make an executive available for an interview.

In the United States, American Express Co. also allows cardholders to use its Membership Rewards points to pay for purchases on However, it uses a different exchange rate for points. With Chase’s card, one point equals one cent–1,000 points can be spent as $10. Amex converts each point to seven tenths of a cent, so 1,000 points would equal $7 of spending.

The payments industry has traditionally been opposed to opening up the process of spending rewards points as cash, Bramlette says.

“The real driver behind what I’ll call the old-fashioned way of redemption is quite simply commercial,” Bramlette says. “It’s to create breakage in the redemption process, meaning if I have to go through a labor-intensive process there’s a good chance I will fall out somewhere along the way. That’s revenue that [the bank] gets to keep.”

Cardholders, however, want to have more control over how they use their points, and a system that allows points to be used as a form of currency could help drive cardholder spending, Bramlette says.

Issuers also benefit from an accounting standpoint, says Brian Riley, a senior research director with the TowerGroup research firm in Needham, Mass.

Issuers typically have to accrue a liability to pay for future redemptions by customers to ensure they can pay for the rewards, Riley says. Rewards programs in which a high number of customers do not use their points can become “an accounting nightmare,” Riley says.

Allowing people to use their points more frequently is “to the issuer’s benefit” as well as the customer’s, Riley says.

Conrad adds that Chase expects to save 700 trees per year by eliminating the need to print a gift certificate.

Both Chase and Amex, which made the service available in September, said making the redemption process easier is one way to strengthen customer ties.

“When you meet the needs of your cardmember … you engender a significant amount of loyalty,” says Josh Berwitz, the vice president of Membership Rewards at Amex. “You continue to drive new cardmembers and enhance spend and loyalty from existing cardmembers.”

A spokesperson for Amex says cardholders who redeem their points tend to spend four to five times more than cardholders who do not use points.

“We want people to use their points,” Berwitz says.

Amex also lets its cardholders use their rewards points to pay for purchases on other websites, such as, and on to buy ads on the social network, Berwitz says.


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