THURSDAY APRIL 5, 2012
Cashback reward programmes are designed in attractive formats to grab consumers’ attention and it is essential to know a bit about how they work to help you choose one with the best options
redit card cash reward programmes offer cardholders a chance to earn money back on credit card purchases. This is a review of the top cash reward cards. The evolution of technology and trends toward convenience continue to drive the growing use of credit cards and electronic forms of payment. The media portrayal of consumer debt, excessive interest rates and hidden fees has given credit cards a negative reputation. However, credit cards can provide tremendous benefit when used responsibly. Besides convenience and consumer protection, credit cards often offer reward programmes that provide additional economic benefits to the cardholder.
Choosing a credit card When selecting a credit card, potential cardholders should consider a number of factors including promotional offers, interest rates, credit limit, reward programmes, lifestyle and how or where they plan to use their card. Although many credit cards offer reward programmes in the form of cash, points or airline travel miles, this article will specifically examine the credit cards that offer the best direct cashback reward programmes. Cardholders that would benefit most from these credit cards are
full advantage of their credit cards reward programmes are paying for something they are not using. Size • Credit card points and miles are earned whenever the credit card is used. The standard model is that for every $1 spent on the card, one point or one mile is earned. However, some cards have special provisions that allow additional points to be earned in certain situations. Branded cards may offer more points for purchases made from that company. For example, a credit card associated with a particular airline or hotel will offer more points for each dollar spent directly with that airline or hotel. In addition, some credit cards offer differing point earnings based upon certain categories of spending, such as offering more points for each dollar spent at gas stations or grocery stores.
Points and miles that are earned may be redeemed for rewards. Rewards also vary greatly from one card to the next. Cards may offer free travel as one of their rewards those individuals that frequently use their credit card as the primary form of payment for many types of purchases, charge a high amount on their card, have excellent credit, desire cashback as a form of reward, and pay their balance off in full with each billing cycle. Carrying a balance and paying interest can negate the cashback benefits provided by these cards. In addition, these cards are a good choice for cardholders who want a convenient rewards programme that does not require additional enrolment or a complex point redemption process.
standing how credit card points and miles work is critical to maximising the value of your credit card accounts. However, there are a wide variety of rewards programmes out there. Terms and conditions, as well as how points are earned and redeemed, change quickly. Even different cards from the same credit card issuer can have widely different rules and point values. The first step to get a grip on these programmes is unTaking you the extra mile These days, it’s not unusual to derstanding how credit card points have at least one credit card that and miles work. earns point or miles. Points can be redeemed for free merchandise, History • During the days of the credit travel or even cashback. Under-
boom, credit card companies were looking for a way to improve the value of their off erings. Annual fees were dropped to zero on many cards, and interest rates were set at historic lows. However, since many credit card issuers used these tactics, something else was needed. Credit card reward programmes that had once been used only on certain specialised cards for niche markets such as frequent flyers were expanded. Even credit cards without individualised, brand name rewards programmes were added to generic programmes such as Visa Signature Rewards, which is offered on cred-
it cards issued by numerous banks. Significance • Credit card rewards are a way to increase the value of a credit card to the customer. However, running these programmes is not free. The money earned by each card has to cover the expenses it generates to make a profit. While some rewards are either purchased at a discount from the supplier or made profi table via another arrangement, the overall cost of running the programme must be covered by revenue generated from the cards. Cardholders not taking
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Benefits • Points and miles that are earned may be redeemed for rewards. Rewards also vary greatly from one card to the next. Cards may offer free travel as one of their rewards. Redeeming points or miles for a free airline ticket is a common use of reward points. Some programmes have a fl at redemption table in which a certain range of total miles flown, or a certain price range of tickets, can be purchased with a specific number of miles. Redeeming 30,000 miles for a round-trip ticket within the US is one common offer. Other rewards are based upon the price of the item, such as 1,000 miles for every $1 the ticket costs. Some cards allow points and miles to be redeemed for cashback or statement credits. Again, some programmes have flat fee rewards.
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THURSDAY, APRIL 5, 2012 KHALEEJ TIMES / ADVERTISING SUPPLEMENT
CASH BACK REWARDS
Access to the best loyalty services Air Miles provides a unique service to partners and members through a strong coalition of brands. Mark Mortimer Davies shares his views with Khaleej Times. Excerpts from the interview: Air Miles is a leader in customer loyalty programme and one of the earliest and most well known in the UAE and the region. How did you make it so? What is the secret of your success and leadership in the loyalty card segment? Air Miles has the fi rst mover advantage in the region and laid a foundation that our strong partnerships continue to build upon. The secret is we provide a unique service to our partners and members with a strong coalition of brands. This allows us to provide information to our partners on a wide range of consumer spend behaviour and allows members to very quickly convert their spend into enough Air Miles to reach the point of redeeming a reward. Unlike many stand-alone programmes that restrict members to one set of stores or one set of rewards our programme offers unique variety and our “any airline, anywhere anytime” offer cannot be replicated by the single airline offers. As we are part of worldwide loyalty leader, Aimia, we also have access to the best Loyalty services in the world — a support base that no other local offerings can match. Since Air Miles has been in the region for over a decade, it has the advantage of time — to build up a strong membership base of over 1.3 million members and also time to forge strong bonds with over 120 partners across the UAE, Bahrain and Qatar, ensuring there are plenty of places for our members to collect Air Miles and reach their rewards targets faster. We have also made various changes to our programme over the years, which have refined what we offer in order to suit our members’ needs. For instance, we offer vouchers that you can use at Spinneys, Rotana, Adidas and Bin Sina and now offer in-store redemptions with our various partners including consumer electronics giant, Emax, Damas and Pan Emirates, which allows much more choice and flexibility when our members decide it’s time to redeem their Air Miles. This increased choice is never more apparent than with our flexible flight rewards offering, which — thanks to our unique setup up as a coalition loyalty programme — means our members are not tied to certain airlines or destinations and can get great deals if they book well in advance of their time of trav-
Chile and Club Premier What are the latest exciting rewards awaiting customers that you would like to talk about? Are these rewards the same all over the region or county specific? Are more shopping rewards for customers and incentives for businesses in the pipeline? Air Miles Middle East has delivered over a million rewarding experiences to its members since launching in 2001 and we are always looking to improve our range of rewards and provide our members with exclusive ongoing promotions. Our latest rewards developments have been offering in-store rewards through Emax, with over 20,000 electronic products to choose from; and our fl exible fl ights, which simply put means no blackout dates and freedom of choice.
Mark Mortimer Davies el. Since the new fl ights system was implemented in July 2011, over one billion Air Miles have been redeemed by members on flights. How do you draw on your global expertise including Aimia to enhance Air Miles loyalty programme in this region? We constantly bring expertise to the region and, through our cutting-edge systems, we are also able to let partners see the next generation of loyalty in action when they visit our worldwide network. For instance, in terms of training, we recently brought international teams out to train our customer service centre team and our service level feedback has been outstanding ever since. One of the main ways Air Miles separates itself from potential competitors is by leveraging the experience on offer from being part of Aimia — a global leader in loyalty management. The level of support from this organisation, which has blazed a trail across the world in terms of loyalty management, is immense. This ranges from cuttingedge marketing techniques, strategies and experience, through to accessing groundbreaking technology on offer from Aimia’s various partners and affiliations, including loyalty analytics and innovation in the emerging digital and mobile spaces. To put Aimia into perspective, the organisation has over 3,800 employees in more than 20 countries around the world and runs the global successful programmes such as Aeroplan in Canada, Nectar in the UK, Italy,
How is technology (internet, mobile communication platforms etc.) being utilised by Air Miles to provide a better customer experience? The results from our recently implemented dynamic pricing for fl ight purchases has already impressive people booking earlier at better rates and having the fl exibility to choose which airline has resulted in members making more bookings for the same number of Air Miles. We have invested heavily in technology, with our website www.airmilesme.com undergoing a major redesign last year, which has been hugely popular with our members as it’s even easier and quicker to find what you need – whether it’s information on collecting, spending or any other questions on the programme. Further developments will continue to appear throughout 2012, with us leveraging our “best in class” technology solutions from Aimia. Almost everything can be done online now, but, if there’s ever a problem, then we haven’t forgotten the personal touch. Our customer service centre is extremely efficient and our customer service representatives pride themselves on the high level of training they have received. Furthermore, Air Miles Middle East employs over 20 nationalities, helping the organisation truly understand its multi-cultural membership. Is Air Miles expanding further into more countries in the Middle East? What is your expansion plan? Air Miles outlets are present in each of the top 10 UAE malls and we also have a strong presence in Bahrain and Qatar, which we are currently consolidating and improving in terms of partners we have on board. However, we are always looking at opportunities in different countries throughout the Middle East and North Africa due to unquestionable demand for the Air Miles coalition loyalty programme — hopefully have more news on this in the near future.
Get more from life with Dubai First credit cards Engineers in loyalty and cashback programmes, Dubai First is dedicated to continuously raising the bar in this field Dubai First always aims to build sustainable long-term value with its customers by harnessing a genuine service experience. Its success is based on two basic principles; simplistic and valueadded products, and transparency. Its rewards and loyalty programmes are testament to its reputation in the UAE market, since inception only in 2007. The company likes to refer to itself as engineers in loyalty and cashback programmes, and is truly dedicated to continuously raising the bar. The rewards and cashback programmes are provided courtesy of its premium-range credit cards, the “Emirati Card” and the “Titanium Life” cards. The Emirati Card, a breakthrough in the world of credit cards, upholds the pride of the Emirati identity for nationals, and attends to the unique requirements of Emiratis. This card boasts the “Al Imtiaaz Rewards” programme where customers can receive amongst the highest cash rewards of up to five per cent for every dirham spent with the card and bonus rewards of up to 2.5 per cent for supermarket and international spends. The bank’s Titanium Life card on the other hand is designed to be a “life-enabler” in every sense. It is a very progressive credit card with its set of offerings blended with a groundbreaking, and already popular cash-back loyalty programme. This card guaran-
tees 10 per cent cashback on duty free purchases and exclusive bonuses on weekend spending, utility bill payments, overseas purchases, Loan-on-Phone and balance transfers. Also, as part of its investment to a customer’s loyalty, based on a minimum annual spend criteria, Titanium Life guarantees a free annual airline ticket to more than 45 destinations. Other unique facilities are also provided by both respective cards, including the regular card essentials. Both cards and their programmes were designed to guarantee up to Dh12,000 in savings per year. Its success in cashback rewards and loyalty programmes is attributed to the fact that it embraces the customer touch points and understands the value of being agile, flexible and thus, adaptive when seeking loyalty, which it is genuinely passionate about. Dubai First understands that customers are always looking for the most sensible and beneficial cards and programmes to incorporate in their daily lives. They seek the value-added yet refined experiences; they want to break out of the limitations of the typical credit cards and programmes promoted by ambiguous marketing messages. Dubai First offers what the customer wants, plain and simple. Go to www.dubaifirst.com to understand how Dubai First can add value to your life.
CASH BACK REWARDS
KHALEEJ TIMES / ADVERTISING SUPPLEMENT THURSDAY, APRIL 5, 2012
III RAKBANK offers its cashback feature on all its Visa and MasterCard credit and debit cards with rates up to five per cent for credit cards and two per cent for debit cards when they are used for international retail purchases, including online transactions, and for international cash advances
A rewarding experience Balance transfer offer from RAKBANK gives customers a three-month interest-free offer alongside cashback rewards and a chance to nab Dh1 million Is your outstanding credit card balance causing you pain? Are you suffering from a severe case of ‘card ache’? RAKBANK has just the remedy. Transfer your balance from other bank credit cards to your RAKBANK credit card at zero per cent interest for three months, plus customers keep saving month after month even after the interest-free period with an interest rate of just two per cent per month. Moreover, by transferring the balance, customers stand a chance to win Dh1 million every six months with RAKBANK MasterCard. You get one chance for every Dh500 you transfer, so the more you transfer the more chances you get. Balance transfer is easy — customers just need to call 04-213 00 00 or send in a request using RAKBANK On-
line Banking to apply or SMS BT to 7010. When evaluating reward programmes, it is important for customers to make a distinction between a credit card promotion, which is a temporary time-bound benefit, and a product feature, or a loyalty programme such as RAKBANK’s ‘Cashback’, which is a more enduring and rewarding benefit. Based upon the bank’s customer feedback, cashback is the most valuable return customers can get for using their cards, as it offers greater savings to customers and gives them the liberty to choose how they would like to benefit from it. RAKBANK offers its cashback feature on all its Visa and MasterCard credit and debit cards with
rates up to fi ve per cent for credit cards and two per cent for debit cards when they are used for international retail purchases, including online transactions, and for international cash advances. The bank also offers up to three per cent cashback on all domestic retail purchases for holders of the premium Titanium credit card and one per cent cashback for holders of all other RAKBANK credit and debit cards. RAKBANK credit cards are ‘free for life’ and come with no annual fee ever. They also offer lifestyle privilege benefits from more than 75 outlets and a chance for MasterCard cards to enter a millionaire draw that takes place every six months. RAKBANK offers six credit cards — Titanium MasterCard,
RAKBANK MasterCard, Visa Classic Card, Visa Gold Card, NMC Master Co-branded Card and RAKBANK Géant La Carte and two MasterCard debit cards. As RAKBANK is dedicated to constantly providing its customers with innovative and value-added products, the bank recently launched its latest online platform, www.rakbankdeals.ae, the fi rst of its kind in the banking industry which provides the bank’s card customers with exclusive weekly deals offering discounts of 50 per cent and more at their favourite outlets. It’s raining great deals for RAKBANK cardholders, so apply now for a RAKBANK card and enjoy zero per cent interest on balance transfer and exclusive rewards.
An eye out for the best returns » FROM PAGE I Considerations • In an effort to distinguish one programme from the next and in an attempt to hide how one reward programme compares to another, credit card issuers often change how points are earned, as well as how those points may be redeemed for rewards. One programme may offer two points for each dollar spent, but then charge 20,000 points for $100 cashback reward. Another programme may offer just one point for each dollar spent but offer the same cashback
reward for just 10,000 points. In effect, this makes both programmes the same for that particular reward. Warning • Beware of creating additional spending in order to generate extra points or miles. This extra spending can lead to increased interest payments or larger balances, both of which will cost more than the points will ever be worth. Only use credit cards that offer rewards points and miles to buy what you would normally buy.
THURSDAY, APRIL 5, 2012 KHALEEJ TIMES / ADVERTISING SUPPLEMENT
CASH BACK REWARDS
Card to support parents NBAD GEMS Co-brand Card is the first education linked credit card that offers parents a discount of up to 11 per cent on school fees at GEMS schools
The National Bank of Abu Dhabi (NBAD) recently launched the cobranded NBAD GEMS MasterCard Titanium Credit Card in partnership with GEMS Education. NBAD’s aim in introducing this card is to offer a helpful and convenient tool for parents. The NBAD GEMS Card offers parents a discount of up to 11 per cent on school fees at their GEMS school. In addition, parents can benefit from zero per cent interest Easy Payment Plan for up to 12 months for tuition payments. This basically means that parents can pay the full aca-
demic year fee using the NBAD GEMS Co-brand Card allowing them up to 11 per cent discount and then pay it in 12 equal monthly instalments without any interest. Since this card is to meet the needs of parents, NBAD felt it was vital that the card also provides special offers at retail outlets relevant to their needs. As a result, the bank partnered with some of the leading eateries and family entertainment venues across the UAE, such as Atlantis, Magic Planet, Ski Dubai, Al Sayegh Brothers Group, Café Ceramique, Sega Republic,
iFLY Dubai, and many other leading merchants. This card is truly designed to support parents in providing quality education to their children. So when it comes to your children’s education, the NBAD GEMS Credit Card offers ample financial support to see them through to graduation. Should an unfortunate event take place for a nominal charge of Dh28 a month per child, the NBAD GEMS Credit Card covers each child for Dh50,000 a year (up to Dh500,000 for 10 years), with maximum coverage of Dh2 million per parent for four children. Teaching children the value of money helps them grow to become financially responsible individuals. This is why we designed a special NBAD GEMS Student Prepaid
NBAD GEMS Student Prepaid Card is a fun way to turn your kids into responsible spenders Card with no annual fees made especially for the young ones that parents can manage. This handy little card allows them to make purchases in and outside of school. The NBAD GEMS Student Prepaid Card is also completely safe since it allows parents to set a daily spend-
ing limit and it cannot be used for cash withdrawals. We have enabled SMS alerts on cards so you can be informed of all spending done with the card. The NBAD GEMS Student Prepaid Card is a fun way to turn your kids into responsible spenders. Reloading the prepaid card is very convenient with multiple options, such as through SMS using NBAD Arrow service, loading through any UAE Exchange or Al Ansari Exchange branch, any NBAD Branch, NBAD CDM (Cash Deposit Machine) and even through
NBAD Online Banking. In order to ensure that the card offers a responsible solution from all angles, the card is made from 100 per cent biodegradable material, which is the first of its kind in the UAE. We also chose to include children in the project. An art competition was conducted across GEMS schools, where the participants used their creative talents to explore the beauty of our world and the importance of protecting it. Their insightful work was so well crafted that the winning piece is the face of the NBAD GEMS Credit Card — a card made for them, by them. This card also rewards the credit cardholders with 1.5 NBAD Stars for every Dh1 of purchase made using the card that can be redeemed at any of NBAD’s exciting list of retail partners including Skywards and flydubai. This card comes packed with numerous other offers as well, such as complimentary Emergency Roadside Assistance, free purchase protection, extended warranty, Credit Shield Plus cover and many more. To top it off, this card comes with no annual fee.
Merchant funded cashback ‘RewardAll’, is a merchant-funded online shopping and rewards programme that brings together over 3,000 diverse online merchants globally Sustainable solutions are the key to sustainable revenues. Short, one-off campaigns tend to involve costly marketing activities and produce short, one-off results. Long-term cashback programmes, however, can build long-term relationships both with consumers and merchants and be seamlessly integrated into a financial service provider’s existing environment. Targeting is key to ensure immediate appeal to particular customer groups and the importance of relevance cannot be emphasised enough. A financial institution that recognises the importance of providing a value-based transaction model from merchants, who are handpicked according to a customer’s profile, will do very well to sustain loyalty and generate incremental revenue. Collinson Latitude’s multichannel products, which include an online merchant funded reward platform, can be seamlessly integrated into a financial service provider’s existing environment. Capitalising on the proven and growing popularity of online shopping in the Middle East is a particularly strong route to customer retention. “RewardAll”, for example, is a merchant-funded online shopping and rewards programme that brings together over 3,000 diverse online merchants globally so that each time a customer makes a purchase through the client- branded “RewardAll” portal, they can earn cash-back which is paid directly into their bank account. From Qatar Airways and BHS to Thomas Pink and Saville Row, banks can provide a bespoke programme according to their customer segment and give their customers cashback at no cost to the bank. It’s a win solution for the customer, bank and merchant with cash-back levels ranging from one per cent to 20 per cent. It’s a well-known fact that merchants have higher margins ( depending on merchant sector) than what a bank alone can offer to its customers, so innovative and creative ways of increasing a merchant partners’ market share need to apply to remain competitive. Discounts and upgrades have their place but cash will always remain king to many consumers and merchants shouldn’t underestimate the power of cash-based incentives. A 10 per cent discount and erosion on tight margin or 10 per cent cash-back?
Collinson Latitude’s multi-channel products, which include an online merchant funded reward platform, can be seamlessly integrated into a financial service provider’s existing environment
Published on Apr 4, 2012