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Study: 40% of consumers have negative loyalty program experience

BY CSA STAFF

New York City — A report released Tuesday by payment system provider ACI Worldwide found that many retail loyalty programs leave consumers feeling underappreciated and many consumers are enrolled in a program they don’t completely understand.

Although three out of four Americans are members of at least one retail loyalty card program, 85% of those surveyed said that they haven’t heard a single word from a loyalty program since the day they signed up. Likewise, 81% say they don’t even know the benefits of the program or how/when they will receive rewards.

The majority of American consumers (62%) join retail loyalty programs so they can get discounts on the things they buy most, according to the survey, yet only 36% received a reward or promotion that made them come back to the store again, and 27% of consumers complain they have received a reward or promotion for something they would never buy.

More than two in five (44%) said they have had a negative experience from a loyalty program.

“Loyalty programs have long been a logical way to leverage consumer satisfaction, but retailers are missing the mark when it comes to reaching out to consumers with information and offers that are relevant to them,” said Rob Seward, senior industry marketing manager at ACI Worldwide. “The end result is that memberships are becoming meaningless.”

The survey was conducted by Wakefield Research and interviewed 1,053 Americans aged 18 and older.

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NRF discouraged by delay of swipe-fee legislation

BY CSA STAFF

WASHINGTON — The National Retail Federation said legislation introduced today to delay swipe fee reform scheduled to go into effect this summer would block retailers from giving discounts to consumers who use debit cards and would cost merchants and the public more than $1 billion per month.

“We are extremely surprised to see a bill introduced that favors Wall Street banks and price-fixing card companies over Main Street merchants and their customers,” NRF SVP and general counsel Mallory Duncan said. “Merchants are ready to pass lower swipe fees along to consumers in the form of discounts and other benefits as soon as reform goes into effect in July but we can’t do that if Congress lets bankers stand in the way.”

Senator John Tester, D-Va., today introduced the Debit Interchange Fee Study Act of 2011, which would postpone swipe fee reductions included in last year’s Dodd-Frank Wall Street Reform and Consumer Protection Act by two years and require a study of the issue. Meanwhile, some members of the House Financial Services Committee are reportedly planning to introduce a bill calling for a one-year delay and a study.

Regulations proposed by the Federal Reserve in December to implement Dodd-Frank would lower debit card swipe fees from their current level of 1% to 2% of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fees set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear. The move would reduce the current $20 billion a year in debit swipe fees by about 70%, or $1.2 billion a month. The Fed is scheduled to issue a final version of the regulations in April and the reforms are set to take effect in July.

NRF filed comments with the Fed in February arguing that the 12-cent cap doesn’t go far enough. NRF told officials debit cards are merely plastic checks and should be honored at or close to face value since paper checks that draw on the same accounts are not subject to swipe fees. Banks’ own filings with the Fed claim only 4 cents as the cost of processing a debit transaction.

“The banks and card companies claim they want to study swipe fee reform but the truth is they want to kill it,” Duncan said. “Congress has already conducted more than half a dozen hearings on this issue, and the GAO and Federal Reserve have done studies of their own. The time for study is over. The time to reduce these fees and take bankers’ hands out of consumers’ pockets has come.”

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Sears Holdings awarded top EPA honor

BY CSA STAFF

HOFFMAN ESTATES, Ill. — Sears Holdings announced that it has been named the 2011 Energy Star Partner of the Year (Product Retailer Category) by the U.S. Environmental Protection Agency (EPA). This is the second year running that Sears Holdings has been awarded this honor for empowering its customers to reduce greenhouse gas emissions and through its numerous initiatives focusing on educating customers about energy-efficient products. In honor of the national recognition and to show appreciation for customers’ ongoing support, Sears stores nationwide and online at Sears.com will offer an extra 5% off all Energy Star qualified appliances purchased with a Sears card starting April 15 through April 23.

"We’re honored to be recognized by the EPA for our work to help customers better understand and access energy-saving, Energy Star qualified products," said Lou D’Ambrosio, CEO and president of Sears Holdings. "This award is a reflection of the significant commitment our entire organization has made to promote energy efficiency and help our customers make changes that allow them to save money."

According to the company, one key effort that distinguished Sears Holdings in 2010 was its leadership in helping customers access rebates offered through the government-funded "Cash for Appliances" program. Presented with this unique opportunity to help more Americans obtain Energy Star qualified products, Sears developed exclusive website resources to educate customers, extended store hours and provided additional offerings to ensure utmost availability.

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