A new social couponing plan is being launched by the nation’s largest lender as a means of incentivizing more use of both debit and credit cards.
Bank of America is currently testing a new program called BankAmeriDeals with its employees in North Carolina, South Carolina and Nevada, according to a report from The Associated Press. Currently, the bank has no timetable for rolling the plan out to consumers, but will soon extend it to its more than 275,000 employees nationwide to test it further.
The plan works by examining stores where consumers have previously made regular purchases and then offering them deals on similar products when they meet certain buying thresholds, the report said. These deals will be offered when a credit or debit card holder logs into the institution’s account websites, and then they click a link to have the offer automatically tied to their account.
But where the Bank of America program differentiates itself most significantly from those like Groupon or LivingSocial is in how the customer sees the benefits of enrollment, the report said. Instead of receiving the savings at the register, they are granted to the customer in the form of a lump-sum, cash-back reward once a month. The bank currently has no limit on the amount consumers can receive in this cash back promotion.
Most customers can expect to receive about 16 or 20 of these promotional offers per month from the bank, but those who tend to redeem them more often could see more, the report said. However, those who do not want to participate will be given the ability to opt out of the program.
The reason Bank of America is offering this type of program now is that the merchants who offer the deals are also the ones providing the cash back, essentially incentivizing use of the bank’s cards in exchange for the added business, the report said. Other financial institutions, such as Chase and Regions Bank, are also testing similar programs.
Banks have been looking for ways to boost card use since the federal debit card interchange fee limit was imposed in July 2011. It is believed that this regulation costs banks billions of dollars in lost revenues annually.
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