Archived Why exactly is there such a big push for red cards?

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This might be a silly questions but I've been wondering why exactly do they push red cards so hard? I understand it's suppose to bring in x-amount more money or guest spend x% more but sometimes I feel like they hammer guest.

I once was checking a guest out and I'd already asked about red card and they declined. My GSTL came over a few seconds later and asked them again, they once again said no and my GSTL said something along the lines of, "are you sure, its as easy as sliding your debit and you get free shipping online... " "No, I'm fine thanks." The guest didn't seem to happy about being hounded.

And today they basically told sales floor to ask guest on the floor(because our scores were low or something?) I'm not sure how I'd go about that. ". . . Would you like to save 20 cents today? You can sign up for a red card!"
 
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The actual answer is......that the fees that Target has to pay for Visa and M.C. transactions are getting out of hand. Merchant fees continue to skyrocket and Target is no exception. So, Target's solution is to issue credit and debit cards through their own bank....Target National Bank. Problem solved. Instead of paying 1.5% to 'Bank X', they just put it in their pocket. It's a huge win for them.

**This is very rough math, so apologies to any accountants I may be offending**
YTD sales are about 38.5 billion. If 1% of all guests (we all know it is much higher than that) use the Red Card, that is 385 million in Red Card sales. The fee savings on 385 million @ 1.5% is approx 6 million.
 
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Easy as pie really. Such a simple answer for this one. Super dumb (I did say super dumb, so if you're smart this excludes you) broads with pissed off husbands because they spend too much get the illusion they are saving when they are really most spending more money because they're thinking, "OH I'M SAVING ALL THIS MONEY!" Nope, they just spend more, make the company more money, and should be labeled idiot of the year award. That's just according to me though. Spot lives happily ever after.

"Awesome! Let's pay over 20 percent interest on crap we don't need in the first place!" It's the American way.]
 
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mrknownothing

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Easy as pie really. Such a simple answer for this one. Super dumb (I did say super dumb, so if you're smart this excludes you) broads with pissed off husbands because they spend too much get the illusion they are saving when they are really most spending more money because they're thinking, "OH I'M SAVING ALL THIS MONEY!" Nope, they just spend more, make the company more money, and should be labeled idiot of the year award. That's just according to me though. Spot lives happily ever after.

Spot thrives because of air-headed impulse buyers who think they're saving money because they don't realize they've been lured into spending more money on **** they don't need.
 
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The actual answer is......that the fees that Target has to pay for Visa and M.C. transactions are getting out of hand. Merchant fees continue to skyrocket and Target is no exception. So, Target's solution is to issue credit and debit cards through their own bank....Target National Bank. Problem solved. Instead of paying 1.5% to 'Bank X', they just put it in their pocket. It's a huge win for them.

**This is very rough math, so apologies to any accountants I may be offending**
YTD sales are about 38.5 billion. If 1% of all guests (we all know it is much higher than that) use the Red Card, that is 385 million in Red Card sales. The fee savings on 385 million @ 1.5% is approx 6 million.

Actually, this is not true. Credit card processing fees have remained about the same for the past many years.

There are actually several benefits to Target for offering the red card. You are correct that they don't have to pay the processing fees, however, you are missing the biggest component....

Who underwrites the Red Card? TARGET NATIONAL BANK

Target actually has their own bank. It is not a traditional bank though. You can't make deposits or anything like that. All the bank does is issue credit cards.

Soooo..... What does that mean? When guests go in to DEBT on their red card, guess what? They owe target that debt. It's not like the guest using a Citi credit card and owing Citi that money. No, any money spent on the red card is owed to target.

So guess what? Let's say the guest has a 20% APR on the red card..... they go into target over a few months and now owe $5000 on the red card.

Guess what? At a 20% APR, if they don't pay that balance off for a whole year, they have paid $1000 to Target in interest.

THAT is why they are selling the red card. Target has their own bank, and they are hoping that people who use the red card will run up a balance they can't pay off right away.... Then they cash in on the interest (which is super high on the red card) that the guest has to pay on the balance.

So basically they are running a loan sharking business with the red card.
 

pellinore

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According to my STL the average Red Card holder spends 300% (yes, I said 300%) more than the average shopper who does not carry the Red Card.

On one of the white boards in TSC there should be a paper that tells what percentage of total sales (on a weekly basis) was on the Red Card. Our percentage of sales that was last posted on our board says 16% of the weeks' sales was by Red Card users. Over the last few months our store's weekly sales has gone from 11% to 16%. Each percentage point is added cash into the pockets of those that make the BIG decisions and get the BIG paychecks.....not those of us who are mere peons!
 
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According to my STL the average Red Card holder spends 300% (yes, I said 300%) more than the average shopper who does not carry the Red Card.

On one of the white boards in TSC there should be a paper that tells what percentage of total sales (on a weekly basis) was on the Red Card. Our percentage of sales that was last posted on our board says 16% of the weeks' sales was by Red Card users. Over the last few months our store's weekly sales has gone from 11% to 16%. Each percentage point is added cash into the pockets of those that make the BIG decisions and get the BIG paychecks.....not those of us who are mere peons!

That is not just for the red card though - it is for anyone with a CREDIT card. Statistically, anyone with a credit card will pay more because they are borrowing the money. If you have a card with a $1000 limit, but only have $500 in the bank, you are more likely to spend over $500. Why? Because you can with the credit card.... even though you don't have the money.
 

redeye58

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...which is why I pay my card off every time I use it & Spot no makee money off me.
It's all a game; ya just gotta know how to play.
 
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It's a multifaceted approach to keeping guests coming back and shopping.

1) Less merchant fees
2) As stated, Target owns the debt so they can make some serious cash off of that, though at the same time there is considerably risk of sucking up the cost if the guest defaults since it's an unsecured debt.
3) Customer retention will be higher if they have a red card since they feel they are saving more.

I would honestly not be surprised if the red card has been one of the most financially successful projects Target has initiated in decades.
 
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Easy as pie really. Such a simple answer for this one. Super dumb (I did say super dumb, so if you're smart this excludes you) broads with pissed off husbands because they spend too much get the illusion they are saving when they are really most spending more money because they're thinking, "OH I'M SAVING ALL THIS MONEY!" Nope, they just spend more, make the company more money, and should be labeled idiot of the year award. That's just according to me though. Spot lives happily ever after.

"Awesome! Let's pay over 20 percent interest on crap we don't need in the first place!" It's the American way.]

Or maybe super smart broads who are sick of listening to their clueless husbands gripe about how much money they spend when said clueless husbands have no idea what even basics such as food, toilet paper and shoes cost. And are we still really using the word "broad"? Or pretending that men are better with money and financial choices? Or thinking that women don't also work for paychecks and have as much say in where this income is spent? What year is it and how old are you, Dude?
 
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Or maybe super smart broads who are sick of listening to their clueless husbands gripe about how much money they spend when said clueless husbands have no idea what even basics such as food, toilet paper and shoes cost. And are we still really using the word "broad"? Or pretending that men are better with money and financial choices? Or thinking that women don't also work for paychecks and have as much say in where this income is spent? What year is it and how old are you, Dude?

Sling bias around much yourself?
 
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I just recently left Spot, and let me TELL YOU....the way they are dogging the guest now (speaking as one) is almost as bad as the people asking for money outside the door! I walked in yesterday to pick up some cheap travel crap, and I was asked and followed by a TM asking if I was interested in the Red Card. When I told her "No thanks, I have the debit version already." she continued to ask why don't I apply for the Credit Card, to which I simply put "I like my cards to offer cash back." She disappeared!

However at my old store, they were also doing the same thing to the TM's who didn't have one already (or didn't want one). I am sorry, but you CAN NOT do that to your employees, it makes you seem even more desperate and sorry.
 

pellinore

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That is not just for the red card though - it is for anyone with a CREDIT card. Statistically, anyone with a credit card will pay more because they are borrowing the money. If you have a card with a $1000 limit, but only have $500 in the bank, you are more likely to spend over $500. Why? Because you can with the credit card.... even though you don't have the money.

Hey, checked on the "profitable sales" board and there is one paper that lists the percentage of sales using the Red Card.
 
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Do you think the current push is to get the Red Card in peoples hands before the 4th quarter?

Sales were so dismal last year, perhaps this is one of the attempts to improve the numbers....


Oh, and xxDudexx, you should be ashamed at your statement and just go ahead and delete it.
 
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StaticSun

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Using a redcard will drive sales in your store. The math backs it up. You have a TARGET card, only usable at TARGET? Oh, guess I'm going to TARGET later to buy a new pair of shoes. Oh, wait, in order to get to shoes, I need to walk past home decor. Wow, I really like that mirror. Okay, walking now. Look at that! Dog food is on sale! Pup is going to always need dog food. Might as well get that now. Oh, here's that pair of shoes I wanted. Might as well get socks while I'm here. Hmm, socks. Getting dressed. Morning. Hey! I need milk and bread! Damnit, we're out of coffee too. Alright, time to go. WAIT!!! Toothpaste is BOGO?

Damnit, I just racked up $100+. That god Target gives 5% off! I'm going to come here more often!
 
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Using a redcard will drive sales in your store. The math backs it up. You have a TARGET carod, only usable at TARGET? Oh, guess I'm going to TARGET later to buy a new pair of shoes. Oh, wait, in order to get to shoes, I need to walk past home decor. Wow, I really like that mirror. Okay, walking now. Look at that! Dog food is on sale! Pup is going to always need dog food. Might as well get that now. Oh, here's that pair of shoes I wanted. Might as well get socks while I'm here. Hmm, socks. Getting dressed. Morning. Hey! I need milk and bread! Damnit, we're out of coffee too. Alright, time to go. WAIT!!! Toothpaste is BOGO?

Damnit, I just racked up $100+. That god Target gives 5% off! I'm going to come here more often!

That's exactly the point, over extending themselves on things they could have waited to buy. I have the debit card version because between student loans and my credit card I don't need to borrow anymore money.
 
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Using a redcard will drive sales in your store. The math backs it up. You have a TARGET card, only usable at TARGET? Oh, guess I'm going to TARGET later to buy a new pair of shoes. Oh, wait, in order to get to shoes, I need to walk past home decor. Wow, I really like that mirror. Okay, walking now. Look at that! Dog food is on sale! Pup is going to always need dog food. Might as well get that now. Oh, here's that pair of shoes I wanted. Might as well get socks while I'm here. Hmm, socks. Getting dressed. Morning. Hey! I need milk and bread! Damnit, we're out of coffee too. Alright, time to go. WAIT!!! Toothpaste is BOGO?

Damnit, I just racked up $100+. That god Target gives 5% off! I'm going to come here more often!

This so much. As a cashier do you know realize how many times a day a customer will say "Oh gosh, I came in for one thing and here I am spending $120 bucks, well at least it dropped down a couple bucks. Oh how I love target." The red card is an amazing market ploy, it's just annoying how we have to push them. But hey it's our job.
 

talan123

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Our store now requires that we after we ask every guest whether or not they can find anything, whether or not they have heard about our 5% off with the Target card. Every. Single. Guest.

I have refused to do it and been written up twice for it.
 
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