Jun 30, 2006

Is this credit card promotion even worth the effort?

I don’t get this one at all. A 1% rebate when you use your Metrobank card at this department store in Manila? Doesn’t this promotion damage the bank’s brand? Why waste money, energy and brand equity on something like this?

Obviously, somebody at the bank thought this was a good idea. But why? My best guess is that the rebate is being financed out of interchange. From a pure financial perspective, it is more generous than most traditional mileage or loyalty points programs which are also financed through interchange, usually at a lower real money rate than 1%. Still, this promotion doesn't make any sense to me. I am obviously missing some local dynamic that makes this seem like a good idea to the people that did it.

(Thanks for sending me the picture, Ling).

1 comment:

Ling said...

1% is nothing ... the Singapore POSBank Everyday credit card gives up to 6% rebates at Watsons, 4% at SPC (petrol kiosk), and even 1% for utilities ...


Although the rewards are in the form of "bank points" (they call it Daily$) to be redeemed against the bills from the same merchants, I still do not see how it is sustainable.

I have a feeling the rebates will die out in a matter of months ...