Credit card companies in Canada and the U.S. are now offering bonus rewards points to customers who purchase specific products from food and apparel companies.
American Express, for example, is giving bonus rewards points to customers who buy targeted products such as Dove soap, Planters nuts, Cheerios cereal and a handful of other items. The credit card companies say these types of moves, which are designed to overtly influence people’s purchasing decisions benefit customers by expanding the number of ways they can earn reward points. However, such programs also help credit card companies such as American Express because it gives merchants a reason to keep accepting the credit cards.
Beyond promoting specific items, the change will also let credit card companies such as Visa and Mastercard, and their merchant customers, to target promotions to very specific customers. Merchants could use the program as an inventory management system, creating promotions for certain items they need to sell or want to clear off their store shelves.
Credit card companies also want to influence how customers spend their reward points. HSBC started a pilot program earlier this year that sent marketing emails to 75,000 customers using algorithms developed by St. Louis-based company Maritz. A portion of customers received a recommended category of credit card reward — travel, merchandise, gift cards or cash back — while the rest received standard marketing e-mails. Roughly 70% of the targeted customers who ended up redeeming their points chose the recommendation generated by an artificial intelligence computer program.
