Bankcard customers that earn a free TV through Fiserv Inc.’s UChoose Rewards program no longer have to wait days for delivery. Now they can drive to a local Best Buy Co. Inc. store and pick it up minutes after redeeming the award.
In what the Brookfield, Wis.-based company is calling the first such example of in-store pickup for merchant-funded merchandise rewards, Fiserv plans to make the service available to a broad swath of customers whose banks participate in its UChoose Rewards program.
With such programs, consumers typically earn points when they make purchases with credit or debit cards and redeem rewards online. Offers are tailored to customers’ spending habits.
UChoose enables banks to provide customers with points-based value redeemable for cash or merchandise funded by merchants, financial institutions or a combination of both.
So far, Best Buy is the only participating national retailer in the UChoose Rewards program, but Fiserv is on the verge of announcing another “marquee” national retailer that also will participate, Holly Krest, Fiserv senior vice president of loyalty solutions, tells PaymentsSource.
Customers that pick up merchandise will be required to spend fewer points because there is no delivery cost, she says.
Merchandise consumers redeem online will be ready at local merchants within 20 to 45 minutes after placing the order online, and Fiserv’s plan calls for participating merchants to provide reserved parking spaces and dedicated check-out lines to speed up the process, Fiserv says.
In a test of the service that began last October, 30% of UChoose participants with the option chose in-store delivery over channels, Fiserv says. The average time between order placement and notification of in-store pickup availability was 23 minutes.
“This is about immediate gratification, which is what consumers always want with rewards,” Krest says.
At least one analyst believes the service will be a hit with consumers.
“The opportunity to pick up rewards merchandise immediately at a store may not be new, but for merchant-funded rewards programs at banks it adds another bonus for customers and a way to get around delivery fees,” Madeline Aufseeser, a senior analyst with Aite Group, tells PaymentsSource.
Though merchant-funded bank rewards programs appear to be growing at a good clip, consumer awareness of the programs is relatively low, Aufseeser notes.
“The timing is good,” for Fiserv introducing a new perk within the program to get consumers’ attention, she says.
Rewards and merchandise discounts vary based on each bank’s unique program structure, Fiserv says.
Some 400 U.S. financial institutions offer Fiserv’s UChoose rewards program, introduced in 2008, and it has seen double-digit annual growth, Krest says.
Fiserv expects the in-store pickup feature to drive greater use of its programs because of its immediacy and value.
“Consumers hunting for deals are savvy enough to know they’re getting an even better deal by not having to pay a delivery fee,” she says.
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