Thanks Again, a provider of rewards to consumers, recently announced that they are launching a service that allows consumers to register up to 5 debit cards with their service, turning every debit card into a rewards card. Their philosophy is refreshing and simple. People don’t want new cards in their wallet. They want more rewards on the same card. This philosophy is embraced by only a few players in the market, including OnCard Marketing. Most banks and retailers alike believe that consumers are going to want a new card because it carries their brand name. This is one type of loyalty strategy but one that is not that effective (or popular) with customers. Thanks Again offers members various currencies, predominantly airline miles, but include cash-back as one option. This is a great announcement because debit cards are the red-headed stepchild of the rewards industry. Since margins / profits are so low on debit cards for banks, it is simply unprofitable for them to offer any kind of rewards on those cards. We are seeing the emergence of third-party rewards providers who are able to provide these rewards to debit card holders since the banks can’t. Consumers love rewards, especially if they can get more without doing anything different. Banks won’t complain because they want to offer debit cardholders rewards. They simply can’t afford it. At the end of the day, this is the discussion of bank-funded versus merchant-funded rewards, a very interesting topic for a future post. I am optimistic that this type of program will catch on with consumers. It will be largely dependent on the cost of the program to the consumer as well as the availability of top-brand merchants in the rewards network.
