Archived Please help me understand why Target pushes Redcards so much

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OK so I know the following reasons:

1 - Interest!!!!! If people don't pay their bill right away there is a high interest rate.
2 - Brand loyalty - People spend 2x the amount when they have a Redcard.

Anything else?

I feel like their pushing of them sometimes borders on harassment. They push cashiers so hard for them.
 

FlowMonkey

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target pays a fee for each non red card credit/debit transaction, usually a percentage of the purchase
 
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^Definitely gets them around any Visa/MC/AmEx merchant rules and fees.

Brand Loyalty also means that people who have a Red Card in their wallet or purse, will more likely shop at Target than another competing store. Which then leads to the whole paying more because it is a card. Easy to swipe cards but a lot harder to give up physical currency, especially when you "save that 5%", you can splurge more anyway since you are "saving".

I think having a RedCard also makes it easier for Spot to keep track of your purchases so they can profile you better, especially with your address, phone number, annual income and all that jazz. Maybe send you some coupons and some "deals" to get you to come back to the store. Some places actually make money selling that information too.
 
B

Barcode

Guest
Brand loyalty.
Interest profits
No merchant fees at point of sale authorization

Sums it up well. Not sure if Target comes out ahead on the debit card or not though, never really got a hold of the numbers ever.
 
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Also Target is the lender. Therefore, if you don't pay your credit card bill in full, they make a ton of money in the 20 something percent interest they are charging you.
 
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Also - at least on the store level that impacts you directly - your flex hours can be tied to how many redcards your store is getting. Some ETLs were talking the other day about not making sales and having to get some redcards to get some hours for flex.
 
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They're also going to be rolling out some new "stuff" related to them. "Stuff" that I don't think is worth it (and stuff that can be done without store cards, but that would make too much sense), mind you, but "stuff" that upper management is excited about. I'm sure your local ETLs and STLs will tell you what that "stuff" is soon enough, but trade secrets and all that jazz.
 

talan123

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They can sell the credit card debt. They just sold the portfolio for $7 Billion dollars.
 

pellinore

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I think that the average RedCard holder spends something like 3 or 4 times more than non-RC holders. I believe that this is one of the biggest issues for Spot to get money.
 
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Sadly isn't just Spot who pushes the redcard so does Macy's. I know someone who works for Macy's and just like us they are expected to push the Macy's card and it is expected in their role as a Macy's worker. I think Kohl's has the Kohl's card they probably have to promote that card I am sure and I am sure there are other stores out there that have the same policies as us. The only gripes I get back in electronics is you should have the rewards card like Best Buy I feel like saying yep preaching to the choir but buddy it isn't going away anytime soon.....
 

mrknownothing

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Sadly isn't just Spot who pushes the redcard so does Macy's. I know someone who works for Macy's and just like us they are expected to push the Macy's card and it is expected in their role as a Macy's worker. I think Kohl's has the Kohl's card they probably have to promote that card I am sure and I am sure there are other stores out there that have the same policies as us. The only gripes I get back in electronics is you should have the rewards card like Best Buy I feel like saying yep preaching to the choir but buddy it isn't going away anytime soon.....

My ex nearly* got fired from Sears because she didn't get enough credit card apps.

*She quit before they could fire her.
 

lovecats

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I worked at Kohl's for a little over a year before I started at Target. We were expected to ask every one who came thru our line. That's why I was happy when I started at Target and we (at the time) only had to ask when we were prompted.
 

pellinore

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Yes, all stores push their store cards....the difference with Target is that people save 5% on every item...every time they shop.

Consumer Reports did a comparison of national stores and their discount programs.....the store with the BEST overall savings was Target....the second best is Kohl's.

The idea for getting people to get a store card helps the store to make more money. Target goes beyond all stores (and even a lot of credit cards) by saving the shopper 5%....every time....on every item. Without the 5% off, Target's program is not any better than other stores.

Target does have one great advantage.......getting the card CONNECTED to the checking account. The debit card doesn't have the fees.

That's why it is so important to get guests to hear that it is a DEBIT card and not a CREDIT card.
 
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Yes, all stores push their store cards....the difference with Target is that people save 5% on every item...every time they shop.

Consumer Reports did a comparison of national stores and their discount programs.....the store with the BEST overall savings was Target....the second best is Kohl's.

The idea for getting people to get a store card helps the store to make more money. Target goes beyond all stores (and even a lot of credit cards) by saving the shopper 5%....every time....on every item. Without the 5% off, Target's program is not any better than other stores.

Target does have one great advantage.......getting the card CONNECTED to the checking account. The debit card doesn't have the fees.

That's why it is so important to get guests to hear that it is a DEBIT card and not a CREDIT card.


Technically target isn't doing anything to save guests money. In practical terms, yes, but the rational behind it is a bit different. They're just factoring out the markup that is placed on all products to counteract the fee (usually 5%) that debit card companies charge on each transaction. If you've ever gone to a small business that offers a "cash discount" or has a minimum purchase amount when using a debit card, this is why (a prime example of this is gun shops, as nearly all charge less if the transaction is done with cash). Because target bypasses visa with target debit cards, they don't have to pay visa the fee, and just pass that on to the guest.

To your last point, in a perfect world that would make sense, but it's been my experience that most guests don't even understand the difference between debit and credit cards. I once told a guest that our debit card links to their checking account, and they told me that sounded dangerous, never mind the fact that most checking accounts are linked to cards by a private company known as VISA! I swear if most Americans understood even the basics of economics, we'd be a dangerous breed.
 
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It doesn't matter if it is tied to your debit card or credit card whatever it still destroys your credit score and some people do not like that when they even apply for it just saying...... They do credit checks!
 

sigma7

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one pull isn't going to destroy your credit score. applying for a card at every retailer...that's gonna hurt. but i understand the sentiment.
 
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