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In today's retail world, it's all about loyalty.
That's one reason an Omaha company that processes debit and credit card transactions is marketing a customer-loyalty card to local and regional retailers similar to programs offered by the big national chains such as Best Buy and Borders.
The PinPoint Card, which combines the functions of a debit, loyalty and discount card, was created for small and medium-sized businesses, said Aaron Barnes, co-founder of American Payment Systems.
The APS effort underscores the importance of loyalty programs to small businesses as they vie with larger, national chains, many of which have sophisticated customer incentive programs.
The Bookworm in Countryside Village, for example, has sponsored a loyalty program for more than 20 years, manager Diana Abbott said. Although Abbott doesn't plan to adopt the PinPoint card, she said such programs are essential for stores like hers.
“Loyalty is not what it used to be,” she said. “There's a tendency for people to look for what financial rewards are involved, either the discount on the item upfront or what kind of financial bonus there is for them at the end of their purchase program.”
Under the Bookworm's program, participants earn a credit equal to the average price paid for 12 books. The credit can be applied to the next purchase.
Jim Barnes, APS co-founder and Aaron's father, said 18 businesses currently are using the loyalty card at 30 locations.
This is how it works: The card is swiped just like a debit card, and the money is transferred from the customer's account to the retailer's; customers receive discounts, which vary among retailers, as well as one loyalty point for each dollar spent. When cardholders reach a certain number of loyalty points, they receive rewards, such as coupons, for use at the retailers.
The participating businesses also offer incentives to customers who enroll in the program, Barnes said. PinPoint cardholders pay a $20 annual fee but no per-usage fees, he said. Merchants pay $95 a month to American Payment Systems to participate in the program.
The company doesn't do credit checks on customers, Barnes said, but it has what he called “blacklist verification.” That means people who have bounced checks and haven't cleared them are ineligible, he said.
Omaha is the first market to get the PinPoint card, Jim Barnes said. The company plans to introduce it in Kansas City, Mo., by the end of the summer and hopes to expand to other Midwestern cities.
Rich Eyberg of the Strawhecker Group, an Omaha-based payments consulting business, said a challenge for American Payment Systems is to build both a cardholder and merchant base.
“You have to have both,” Eyberg said.
Lori Foerster, owner of Crane Coffee, said her loyalty program, which is eight years old, has about 12,000 active cardholders. Like the Bookworm's, it offers value in exchange for regular visits $3 toward a purchase after 10 drink purchases. And like the PinPoint program, it features a swipe card.
Chris Hamilton, manager of One Drake Place, a hair salon near 120th Street and West Center Road, said the PinPoint Card allows her to offer more value to customers. They receive 25 percent off retail purchases on Mondays and 15 percent off Tuesdays through Saturdays.
“That's one reason why it appealed to us, it's kind of a give-back program,” she said. “We thought it was a really cool, innovative concept. People are spending money anyway and, in this economy, to give them some kind of reward for their loyalty is really nice.”
PinPoint also tracks dollars spent, frequency of use, customer demographics and other information that helps businesses identify and market to their target audiences.
“I can target age, birthdays, target areas of town, I can do all kinds of specials,” Hamilton said.
The cards require that customers punch in a four-digit PIN number, so transactions at participating restaurants occur at diners' tables.
American Payment Systems installs pay-at-the-table hardware, which also accepts standard credit cards, Aaron Barnes said.
“We had to bring it to the table, so while we were at it, we also let the credit card run through that same pay-at-the-table device,” he said.
The pay-at-the-table technology is attractive to restaurants, and something customers will appreciate, said Rick Fox, owner of Julio's West.
Experts say credit card fraud is increasing at restaurants, because servers take cards out of the cardholders' possession and can add charges undetected. Julio's patrons have actually followed servers to the register to keep an eye on their credit cards, Fox said.
Fox said the restaurant has an established and successful loyalty program, so he will continue to operate it as well as the PinPoint Card program. If the latter proves popular, he might consider combining the programs.
Contact the writer:
444-1074, john.keenan@owh.com
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