Store-Branded Credit Cards Triple How Often Cardholder Shops There

They tell us if we can get someone to sign up, and be approved, that we have guaranteed that that customer will shop at our store, on average, three times more often than they would have if they didn’t have a card with our store’s name on it.

– a retail sales clerk when asked what she thinks about the credit card applications she has to churn up if she wants to keep her job.

An Interesting Conversation About Store-Branded Credit Card Applications [No Credit Needed]

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  1. Coelacanth says:

    Hate to say it, but I know several people who follow this logic. I happen to have a Macy’s account (with a $0 balance), but it allows them to mail me “exclusive coupons” and catalogues with all their latest promotions…

    …which can only be good for business.

  2. care of Captain Obvious, CFP.

    The special sales are usually pretty modest (say, an extra 10% on one day a month) and can be easily trumped by looking on FatWallet or SlickDeals, etc.

  3. B says:

    Correlation does not equal causation. I think it’s just as likely that customers who shop regularly at a particular store are more likely to get a store branded credit card.

  4. crescentia says:

    I hated having to get customers signed up for these kind of cards. I refused to do it. I think the four months that I worked at a department store I only signed up two people. It’s a total fraud.

  5. azntg says:

    I think fellow commenter B is closer to the truth than the retail sales clerk.

    My parents have multiple store cards (Macys, JCPenneys, PC Richards and what have you). However, they rarely shop at those places, even with the endless coupons that are sent to us through the mail. Same with some of my other relatives and with some of my friends.

    I personally promised not to create all those stores cards unless I really want to take advantage of some good financing deals. If anything, the lack those cards help keep my credit file relatively manageable (fewer cards to account for).

  6. blackmage439 says:

    Maybe this would be true for me if Kohls would actually send me their %-off cards in the mail again. I haven’t seen one in over five months.

    Kohls? Are you listening? You have a male shopper here who actually buys new articles of clothing each year!

  7. stanfrombrooklyn says:

    Here’s what I always tell those people that say “You can save XXX dollars today.” I say, “Actually I’m in the process of buying a house and if I allow you to pull my credit report to give me a card, it will push up my mortgage rate and cost me about $20,000 over the life of my mortgage.” Of course it’s not true but at least they’re less pushy.

  8. chrisjames says:

    “They tell us…”

    Who’s “they?” The corporate brainwashing works on employees just as well as customers it seems. I have two store-branded cards, and I never use either of them, nor do I shop at the stores any more often than I did before getting the cards. The cards were one time things, used for zero-interest financing.

  9. ChChChacos says:

    As a college student I work part time at Old Navy. Each week on my schedule I have a number of credit cards written on the bottom that I’m supposed to fulfill. That haunting number located right next to my days off. BLAH. I hate credit cards, I hate hassling people to sign up for them. Do I want a credit card with a 23% rate? NO. Do they? Probably not. Not to mention the town this Old Navy is in is rather small. Therefore everyone and their brother who live there probably already have one.. so at some point it’s going to get close to impossible to keep signing people up except for tourists.

  10. r081984 says:

    I do not believe this.

    I sign up for store branded cards and get the 10% discount and then I never shop there again.

    I think this is the case that those who like shopping at the store get the store branded card as B has said.

  11. xamarshahx says:

    or do people who spend more get the cards because of the rewards?

  12. beavis88 says:

    @r081984: Agreed. In fact I am on hold as I type this trying to cancel my Haverty’s card after saving several hundred dollars using one of their promotions :)

  13. Wow! I guess that means that without the store credit card, I’d only shop at B. Moss once every SIX years!

    (B. Moss = my favorite women’s clothing store, the only store credit card I have, but I’m so lazy about shopping I just never, ever go, and my card’s always been purged from the system when I try to use it.)

  14. ConsumptionJunkie says:

    I think having a store branded credit card, and going, through the approval process, allows the store to become part of your identity. I have a Barney’s card, and as a “Barney’s guy,” I feel out of place at Saks or Neiman’s.

  15. Propaniac says:

    Hmm. It seems a little odd that the quote seems to attribute the increased sales (if they exist) to the fact of the customer just having the physical card, and not to the customer receiving coupons or discounts because they have the card. I got a Macy’s card because I shop there a lot, and I probably buy a bit more stuff there than I would without the card, but it’s because of the coupons and also because a lot of the stuff I decide to buy has an additional discount if you use your Macy’s card.

    Honestly, I’m not that bothered by getting asked if I want a store credit card, it’s easy enough to say “No thanks” (although it always feels odd when they just say “Would you like to save [X] today?” and I say no, since of course I WOULD if I didn’t have to get a new credit card to do it).

  16. beboptheflop says:

    I don’t see anything wrong for SALES associates to sell store brand credit cards. If they didn’t want to do it in the first place, maybe they shouldn’t get a job in sales. Most store brand card holders are loyal to the company and do end up spending more money at the store than bank card holders. It’s only logical for the company to want to keep customers coming back and buying more. It’s working capitalism. That’s how they stay in business. The customer can just politely decline if they don’t want the card. Performance reviews for the sales associate include credit apps, plus sales and service. And they are told that this part of the job when they interview. Plus the sales associate is financially compensated for every card they open. It’s simply part of the job.

  17. Nytmare says:

    @beboptheflop: I know whenever I apply for a credit card, someone from the credit card company always calls me up trying to get me to buy specific items of clothing and housewares. And I am so pleased to get these calls, because I have no other convenient ways of obtaining clothing or housewares, and don’t feel like wasting time comparison shopping for items that better meet my needs.

  18. eskimo81 says:

    And this is news………how?

  19. crazydavythe1st says:

    They used to tell us this when I worked at Fry’s Electronics some time back. Getting the customer to sign up for a Fry’s Credit card was more important then even the actual transaction. The normal APR was 24.99% if I remember right, perhaps that’s why they hounded us to get these cards. The most amazing part, however, was that there was always some chum that got ridicoulously excited when they were offered a “free” credit card.

  20. endless says:

    Theres a TON of advantages for retailers to have their own cards.

    One: no use charges for the retailers, visa takes a cut whenever you use the card at a store. if its a store branded card, the company doesnt take that hit.

    two, the aforementioned interest.

    three, if the customer has a higher spending limit, it can lead to bigger purchases.

  21. Erica says:

    When I worked retail in college we were partially evaluated for raises based on credit card application attempts and approvals, so our stores often gave the “sign up now” discount for attempts. More often than not we had people apply almost biweekly to get the discount knowing they would get denied, shredding their credit. Once I reached a point where I refused to browbeat customers like this into applying, I found many of them didn’t know what a beacon score was.