June 03, 2010
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News: Target To Give Away Five Percent
Target is launching a new marketing promotion that pays customers immediate rewards. Customers who pay for their purchases with a Target REDcard which includes the Target Credit card, Target Visa credit card or a Target debit check card, will receive an automatic five percent discount off their total purchase. Gregg Steinhafel, Chairman, President and CEO of Target Corporation said the company believes the earnings produced by the debit and credit cards as well as increased sales will offset the cost of the discounts. Target expects to realize a same store increase by one percent to two percent.
At the end of Target's fourth quarter 2010, its credit card accounts receivables were at $7.3 billion and decreasing. At the current rate of decline, Target expects its credit card accounts receivables to be nearly $5 billion. The company hopes the new promotion will help to stabilize accounts receivables. The current rewards system will no longer be offered when the new program is launched. However, new cardholder accounts will receive an initial 10 percent off coupon while existing cardholders will be given the opportunity to earn a coupon for 10 percent off a future purchase. Steinhafel said that card customers participating in the current rewards program will continue to earn rewards until the new program is launched.
The major retailer has been testing the new Target cards rewards program since October 2009 in Kansas City where it received an excellent guest response. Stores involved in the test have received significant sales and profit increases particularly in the higher end bracket. Target will also be initiating changes in its current 10 percent off Pharmacy Rewards program. Pharmacy customers will receive 5 percent off a future shopping day after filling five prescriptions and for them with a Target REDcard. Target is the second largest mass discount retailer in the U.S. only second to Wal-Mart. The company is based in Minneapolis, Minnesota and operates Target Corporation's retail segment stores throughout the U.S. In addition to its store operations, the company operates a lucrative general merchandise and food discount business online as well as a credit card portfolio that offers branded proprietary card products.