3 ways credit cards can get you better daily deals
By Melody Warnick | Published: December 20, 2012
Like Groupon's 50 million other customers, you may have once thrilled to see offers of cut-rate manicures and breakfast burritos flood your inbox. Now? Not so much.
"There were so many [daily deal] companies, and all of them were growing really, really quickly," says Boyan Josic, CEO of Daily Deal media, which tracks the industry. "Consumers started getting emails from 10 different deal sites, and they'd recognize maybe half of them." With over 500 deal companies vying for your attention, deal fatigue may have made you more likely to hit the unsubscribe button than to buy that 60-percent-off teeth whitening kit.
That doesn't mean we're ready to give up on bargain-hunting completely -- and neither are a handful of deal companies. Instead, they're using credit cards to track customer loyalty, reward you for coming back and, ultimately, tie offers to a hassle-free swipe of your credit card. Here are three ways your credit card can make you fall in love with daily deals all over again:
1. Sign up for a daily deal credit card. Branded credit cards such as Amazon Visa and the Southwest Airlines Rapid Rewards card have long been the domain of big retailers and airlines. But a study conducted last year by research firm LightSpeed found that 34 percent of Groupon users, as well as 27 percent of LivingSocial users, were interested in a branded credit card for the daily deal sites. It didn't take long for LivingSocial to jump on the bandwagon, partnering with Chase to introduce its LivingSocial Rewards Visa Card in early 2012.
Like other branded cards, the Visa can be used on anything, anywhere, accruing reward points at the rate of 1 point per dollar spent, or 3 points per dollar spent on dining. But cardholders earn five times the rewards -- 5 points per $1 -- for buying a LivingSocial deal. Once you've accumulated 100 reward points, you get a Deal Buck, which translates to a dollar off your next LivingSocial purchase. It doesn't sound like much, but for LivingSocial power users, it's a 5 percent rebate on all their purchases.
2. Get rewards for loyalty. Some businesses complain that daily deal site customers swoop in, hand over a coupon for a stunning deal and never return. A survey by Raymond James found that 39 percent of merchants weren't likely to run another daily deal promotion in the next few years, citing, in part, how few repeat customers they gained from the deal.
To combat the problem, Groupon is piloting a credit card-linked tracking system called Groupon Rewards. Instead of buying daily deal vouchers, customers simply register their credit or debit card in the rewards program at the Groupon Rewards website, then swipe their card at participating merchants. Once they've spent enough, they'll unlock a reward, like $10 off a $30 purchase at the local bistro. Although the program's currently being reworked, when it was pilot-tested in a few cities in 2011, 30 percent of eligible merchants signed up within the first two months, and "pilot results show that Groupon Rewards customers are more loyal than other customers," according to CEO Andrew Mason's stockholder letter. The good news for Groupon users: You get discounts instantly, without buying or printing vouchers.
Bloomspot, a website focused on high-end offers including luxury travel, dining and services, takes a slightly different tack with its loyalty program, Bloomspot Encore. When customers redeem a voucher, they get rewarded for every dollar they spend above the certificate value (about $140, on average) and rack up Bloomspot credits if they return to the business another day, which around 72 percent of customers do. Up to 62 percent of users opt into the Encore program, registering their credit card online so the company can track and reward credit card purchases.
3. Pay attention to your card. Using credit cards to track and reward loyalty seems like a smart strategy for daily deal sites, but a few young companies want to cut out the middleman completely and transform your credit card company into the source of the deals. One such business, edo, partners with banks to get personalized offers to customers -- no voucher required. When your bank enrolls in edo's programs, your card is automatically enrolled too. Then all you have to do is swipe your card at a merchant that's offering a deal. For instance, if Target or Gap offers $10 off a $40 purchase, just pay with your credit card and you'll get an instant alert through text or email that a $10 refund has been deposited in your account.
To Jeff Fagel, edo's vice president of marketing and brand development, the convenience factor can't be beat. "You're using the card already in your wallet. There's no clipping of coupons or printing of vouchers, no downloading of separate applications and no presenting of coupons. You just use your credit card that's already in your wallet, swipe it at the point of sale, and money is redeemed back into your account."
You're using the card already in your wallet. There's no clipping of coupons or printing of vouchers, no downloading of separate applications and no presenting of coupons.
VP of marketing and brand development, edo
Most major banks and credit card companies have already rolled out their own deals programs, including Capital One Deals, Chase My Offers, BankAmeriDeals, American Express My Offers and Ally Perks. Some cards require enrollment, others make it automatic. To check out the deals that may be yours for the swiping, log into your credit card account online or download your bank's mobile app. As Fagel points out, "The future of shopping is really about technology." And in this case, technology can help you get a bargain without the hassle. That cut-rate manicure is looking better again.
- Is it time for a holiday credit card swap? – Between gifts, holiday travel and year-end expenses, the holidays are a good opportunity to score major rewards using the right credit card. Just make sure you meet minimum spends, avoid fees and don't carry a balance ...
- 6 reasons to put all your wedding expenses on one credit card – By using one card for all wedding-related expenses, you can more easily stick to your budget and keep track of expenses ...
- 3 ways credit can help ease the costs of pet ownership – Credit card sign-up bonuses, pet store loyalty programs and special financing for medical emergencies can take a nip out of those pesky pet care costs ...