U.S. Bank, a subsidiary of U.S. Bancorp, is stepping up its rewards card offer in the highly competitive rewards card landscape.
In an apparent industry first, the bank’s deal with gift card exchange website Plastic Jungle Inc. is enabling holders of its FlexPerks Travel Rewards Visa Signature cards to turn unwanted or unused merchant gift card balances into FlexPoints, Bob Daly, senior vice president and head of Flexperks at U.S. Bank Retail Payment Solutions, tells PaymentsSource.
The companies announced their deal on March 22 (see story).
“We’re just trying to continually refresh the product and introduce new innovation and keep our customers engaged,” Daly says.
The partnership will bring more gift cards to his site while benefitting a consumer set that is highly motivated, Plastic Jungle CEO Bruce Bower tells PaymentsSource.
“We know they already want that currency,” Bower says. “We’re presenting our offer in a situation where a consumer is already trying to accomplish something. Contextually, that makes our offer much more relative and desirable, and as a result that will result in very good traffic. This is going to be a bellwether.”
The unusual conversion into rewards points from gift card balances should strike a chord with cardholders on a budget, Daly says. The bank also offers its rewards cardholders points for getting online statements instead of paper statements, or taking online surveys.
“Earning points typically with a credit card program is so associated with spending with the credit card,’ he says. “This is another way.”
A Flexperk cardholder wishing to convert gift card value into points can go to the U.S. Bank FlexPerks Travel Rewards promotional site and click on the Plastic Jungle icon. Once at the site, they would enter the merchant issuing the gift card and the gift card number.
Plastic Jungle validates the card as valid as well as the value remaining. An algorithm determines the number of FlexPoints the balance is worth and offers the total to the cardholder. If he accepts the offer, he clicks “Accept,” and the points show up in the account within two business days.
U.S. Bank later this year will repurpose Plastic Jungle technology to offer FlexPerks cardholders the choice of a FlexPerks branded prepaid card loaded with the dollar value of an unwanted gift card, Daly says.
Whether there is a financial agreement involved with the partnership with Plastic Jungle, Daly would not say, but said the partnership was not formed for the purpose of making money from the partnership itself.
The offer fits into his company’s long-term strategy, Bower says.
“For us it’s crossing the threshold between one form of virtual currency and another form of virtual currency, and that’s very consistent with our vision for what our business wants to become and how we’re positioning ourselves as it relates to all forms of currency, whether it be gift cards, loyalty points or other forms of currency,” Bower says.
This partnership fits into banks’ pursuit of differentiation, Madeline Aufseeser, Aite Group senior analyst, tells PaymentsSource.
“The loyalty and reward market to drive consumer spend and share of wallet on credit cards is highly competitive, with all different types of programs in the market,” she says. “It still remains to be seen if consumers perceive that they are getting an appreciable value in exchange for the gift card that may otherwise not have been redeemed.”
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