Credit Cards Retail
Low Customer Use Prompts Target to Drop 'Smart Chip' Feature from Credit Card
By Scott Carlson, Saint Paul Pioneer Press, Minn.
Mar. 3--Target Stores said Tuesday it plans this summer to drop the embedded "smart chip" feature from its namesake Visa credit card over the next year, citing low consumer use.
The Minneapolis-based retailer added the chip to its Target Visa card shortly after rolling out the credit card program 2 1/2 years ago. The chip technology enables shoppers to access special offers through the Internet or store kiosks without paper coupons, and track points redeemable for merchandise.
Target and Visa said their co-branded credit card initiative has been a success, noting more than 9 million accounts have opened since the fall of 2001.
Also, the Target Visa credit card has helped boost its parent company's financial results. Last week, Target Corp. reported its consolidated credit card operations, led mostly by Target Visa, generated a pre-tax profit of $641 million in 2003, a 20.5 percent increase compared with the prior year.
The retailer said "smart coupons" -- the only loyalty program requiring use of the smart chip -- experienced limited use by shoppers.
Don Davis, editor of Card Technology magazine, was not surprised by Target's decision, contending the retailer did not effectively promote the feature.
-----
To see more of the Saint Paul Pioneer Press, or to subscribe to the newspaper, go to http://www.twincities.com/mld/pioneerpress.
Posted by Craig at March 3, 2004 08:41 PM