Card-linked offers: Shopping deals you're not aware of

Shopping deals connected to your credit card are gaining ground
Shopping deals connected to your credit card are gaining ground

Programs that give shoppers retail deals when they use certain credit or debit cards are not new, but they're gaining ground. If you find deals that are right for you, they can be an easy way to save money.

Card-linked offer, or CLO, programs automatically apply merchant discounts or cash-back rewards when you use your registered card at participating businesses -- either in person, online or through a mobile device. If you've ever used BankAmeriDeals, Amex Offers, or a dining rewards programs such as AAdvantage Dining, you've used a card-linked offer program.

Banks and other companies offering these programs present them as hassle-free alternatives to traditional PAPER coupons and online shopping promo codes. "Consumers are able to save money on the types of things they already like to buy, and don't need to bring coupons to a store to get the rewards," says Dani Cushion, chief marketing officer for card-linked marketing firm Cardlytics. "It's simple to use, and the rewards are highly relevant since they're based on past purchase data."

It's an idea that appeals to many shoppers. More than 4 in 10 consumers (42 percent) who use debit or credit cards say they would prefer using an automatically applied discount or coupon linked to their payment card, according to an August 2015 survey that commissioned from GfK Custom Research North America. Among cardholders 18 to 34 years old, 54 percent expressed a desire to use card-linked offers.

For now, usage remains low. Only 4 percent of respondents say card-linked offers are the most common way they redeem coupons. The most common coupon-redemption method remains paper -- from the newspaper, mail or printed from the Web. Paper coupons are used most often by 63 percent of cardholders. Presenting online discount codes is a distant second at 17 percent. Presenting a coupon or discount on a phone came in at 15 percent.


Coupon method most often used
Paper coupon
Discount code for online purchase
Discount code for mobile purchase
Card-linked offer
Source: poll fielded Aug. 28-30, 2015, by GfK Custom Research North America. In the survey, 819 U.S. adults who use credit and debit cards were asked, "When redeeming coupons, which of these do you use most often?" Margin of error + / - 3.5 percentage points.

Once consumers hear of the offers, though, they'll try them. Roughly half the survey respondents had heard of one or more of the common card-linked offer programs, but of those, nearly 9 in 10 had tried one.

CardLinx Association, a nonprofit trade group, finds growing interest in CLOs. "CardLinx's market research includes some of the largest companies in the industry, such as Bank of America, American Express, Microsoft and Facebook," says CardLinx Association CEO Silvio Tavares. "Ninety percent of our research participants have indicated substantially increased usage of card-linked offers by consumers and merchants over the past 12 months."

Tavares says he expects the rate of growth to accelerate in 2016, "as merchants and brands create more creative, seamless CLO campaigns and consumers continue to seek out experiential purchases with companies they trust."

How card-linked offers work
Each program operates a little differently -- some require you to enroll in the program; others just ask you to log into your card account.

When you log on to your linked bank or credit card account, you're presented with discount offers at clothing retailers, restaurants, grocery stores or other merchants, says Dani Cushion, spokeswoman for card-linked marketing firm Cardlytics. While the offers are often based on previous shopping, no personally identifiable consumer information leaves the bank's firewall; neither Cardlytics nor marketers involved with its platform see such data, she says.

Some deals are discounts at the register, others are cash-back rewards when you purchase from participating merchants. In the latter, consumers "select the rewards they like, then have money deposited directly back into their account when they use their card to make a purchase at that retailer or restaurant," Cushion says.

See "Compare 3 card-linked offer programs" chart

While many offers come from major banks, smaller financial institutions run CLO programs too.

The firm Access Development operates 10-year-old Zions AmaZing Deals for Zions Bank, a program that includes thousands of merchants in Zions's geographic footprint in Utah and Idaho. Zions deals have included a 15 percent discount at a Peruvian restaurant, a cash-off deal for services at a car aesthetics and window tinting business, and a coupon for a meal at a Salt Lake City Dickey's Barbecue Pit with purchase of another meal and two drinks.

"Every CLO network is a little bit different," Access Development's product development executive, Kelly Passey, told 

Don't be wooed by 'deals' on unnecessary items
Consumer advocates point out that, as with other types of sales or discounts, an offer is not a deal if it's for something you don't need. But for products you do need, CLOs can save you the hassle of clipping coupons. You might even be able to land a significant discount on a big-ticket item, notes Linda Sherry, director of national priorities, at Consumer Action. "If it saves you on something you need to buy anyway, that's a good thing. So there are definite advantages about these programs."

She cautions, however, that consumers should be aware of the fees and interest rates associated with their credit cards, and not simply discount offer programs. "I wouldn't necessarily go out and make a relationship with a bank because of these deals," says Sherry.

Card-linked offers could present some privacy issues, but a firewall keeping identifiable consumer information from merchants probably should make the deals palatable for consumers, she says.

Still, she has a pet peeve about the programs. As a Bank of America customer, she personally has found the offers a bit annoying because they're often short-lived and from merchants she doesn't necessarily frequent. Her ideal: a permanent 10 percent off at her favorite grocery store. "That would be the very best-case scenario for a consumer," she says.

Merchants need more convincing
While CLOs bring rewards to consumers, they don't always pay off for retailers. "To a large extent, merchants aren't seeing a return on their investment," Access Development's Passey says. "They're providing these offers with the understanding it'll result in incremental revenue and new business, but most aren't seeing that."

He says the most successful programs involve the credit card issuer working hard to market the programs and drive business to the merchants. "And the merchants are willing to offer more and better deals because they see the return," he explains. "The more return those merchants see, the better merchants a network can bring in," he says.

Brandon Logsdon, president and CEO of Excentus Corp. and the Fuel Rewards program it provides to retailers, agrees that CLO programs suffer the same weaknesses as daily deals platforms such as Groupon in delivering long-term customer loyalty. The strategy "needs a makeover" to ensure consumers can earn frequent rewards from everyday purchases, while giving merchants and brands more control and customer insights, he wrote in the online trade journal PaymentsSource in July.

Logsdon sees an opportunity for a "coalition loyalty" model, such as the one his company is building out, that allows consumers to connect their cards to a broader merchant network that can track data across cards and banks, providing retailers a better view of customer behavior.

Survey methodology
The poll was conducted Aug. 28-30, 2015, by GfK Custom Research North America, using the GfK "KnowledgePanel," an online probability-based panel designed to be representative of the U.S. general population, not just the online population. The study consisted of a nationally representative sample of 1,029 adults 18 years or older, including 819 who use credit or debit cards. Statistical results are weighted to correct known demographic discrepancies such as age, sex, race, education and geographic location. The margin of sampling error for the complete set of weighted data is plus or minus 3 percentage points, and 3.5 percent for the cardholders. 

Program Requirements Deal types Extras
BankAmeriDeals No program sign-up required, but you must be enrolled in online banking and have an eligible Bank of America debit or credit card. Go to online banking to choose deals. Cash-back rewards are credited to bank, money market or credit account. Program is also available through the Bank of America mobile banking app.
Amex Offers Log into your online American Express account and add dining, shopping, entertainment and travel offers to an eligible AmEx card. You also can register your cards for the program through Twitter or Facebook. Statement credits, extra Membership Rewards points or discount promo codes. Examples: Spend $40 at LongHorn Steakhouse, get a $10 statement credit. Receive 30% off Teleflora with a promo code.

Find nearby offers through AmEx mobile app.

AAdvantage Dining Must be a member of American Airlines AAdvantage program. Then enroll in AAdvantage Dining online and register any credit and/or debit cards (not just those that are co-branded as AAdvantage cards). Search for restaurants, bars and clubs among more than 11,000 participating outlets, and use your registered card to pay the bill. Earn up to 5 AAdvantage miles for every dollar spent, including tax and tip. Examples: Earn 3 miles per dollar spent at New York's Aria restaurant; 3 miles per dollar spent at Buca di Beppo in San Francisco. Earn 1,000 extra miles by spending $30 on your first dine within the first 30 days of enrolling.

See related: Privacy or rewards? Some card programs force you to choose, 5 things to do now to avoid holiday debt, Balancing need to save against urge to earn rewards

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Updated: 01-22-2019