What happens next Where's my refund? Best CD rates this month Shop and save 🤑
MONEY
Macy's Inc.

U.S. gets first cross-brand loyalty program

Hadley Malcolm
USA TODAY
Macy's is participating in the new Plenti loyalty program, the first of its kind that allows consumers to earn and redeem points across multiple brands.

Some of the biggest consumer brands in the U.S. are collaborating on the country's first-ever cross-brand loyalty program for shoppers.

No more unlimited plastic keychain cards or forgetting that ream of coupons the register spit out at you the last time you bought a toothbrush at the drugstore. At least if you're someone who likes these companies: Macy's, Rite Aid, AT&T, ExxonMobil, Nationwide, Hulu and Direct Energy are the initial companies behind the effort, announced Wednesday and operated by American Express' loyalty division.

Consumers will be able to earn and redeem points on the Plenti program, launching sometime in May, with any of these brands. Buying a pair of shoes at Macy's will give you points you could use toward your AT&T bill; buying a tank of gas will help earn cash toward your next insurance payment.

The program is not connected to a credit card, and there is no cost sign up. Customers can use any payment method they want.

"The value proposition behind this is just really great for the consumer," says Martine Reardon, chief marketing officer for Macy's. She says she was first approached by American Express about partnering on a loyalty program three years ago. It was shortly after American Express bought Loyalty Partner in 2011, which operates similar multi-brand loyalty programs in several other countries.

"That's really when we started getting more familiar with this concept," says Abeer Bhatia, head of U.S. Loyalty for American Express.

The programs have garnered significant consumer buy-in. In Germany, which has had a "coalition" loyalty program for 15 years — operated by Loyalty Partner — nearly half of all households participate.

"The fact that I can get Band-Aids and get points for that and then buy myself a dress, that alone, I think, will be attractive to a lot of consumers," Bhatia says.

The brands that are participating have the benefit of scale and consumer appeal, says American Express, adding that 70% of the U.S. population lives within 5 miles of at least two participating locations. And brands without physical locations, such as Hulu, still have broad national reach online. American Express hopes to bring more brands on board, though they would be in industries that aren't represented yet, such as food, autos or airlines. The program won't have competing brands from the same industry.

Matt Schulz, a senior industry analyst for CreditCards.com, says he's never heard of a similar program, but that initially, it sounds like consumers will only come out ahead.

"Anything that gives consumers more options, more flexibility when it comes to loyalty and cashing in rewards, is a good thing," he says.

Each brand will operate the program slightly differently in conjunction with already existing loyalty programs, and each has the freedom to decide how many points to reward per dollar spent. But one point will equal 1 cent. Customers have to acquire $2 worth of points before they can start redeeming them.

Rite Aid will roll its Wellness Plus program into Plenti, issuing new loyalty cards to its 25 million current members. Customers will be able to earn Plenti points on certain promoted products, though they will still get Wellness Plus points on every purchase. Wellness Plus points go toward earning elevated member status, such as getting 20% off all year after a certain amount of spending. Plenti points will be redeemable as cash toward a purchase.

Macy's will continue operating its Star Rewards credit card program — about half of its customers are members — in addition to Plenti. Reardon says the retailer hopes it will be able to attract more Millennials who may not want to take out a credit card. Customers will earn Plenti points on almost every purchase, excluding some luxury brands at flagship stores in New York City and San Francisco.

At participating companies such as AT&T, Hulu, Nationwide and Direct Energy, consumers will be able to earn points simply by paying their bills.

For the companies involved, the program both expands their potential customer reach and encourages more visits, since having multiple brands participating means consumers will acquire, and be able to redeem, points more quickly.

"The challenge with loyalty programs is that it takes you a very long time in one brand to actually earn some rewards," Reardon says. She says that Macy's ultimately decided to participate in Plenti because it will allow "our customers to earn rewards quickly and use them right away. It's immediate gratification."

Rite Aid is hoping to appeal to new customers who frequent the other brands involved but not necessarily the drugstore chain. "What the coalition offers us is the ability to introduce our brand to customers who might not be familiar with us today," says John Learish, senior vice president of marketing for Rite Aid. "It give us tremendous reach and ability to expand our customer base."

Featured Weekly Ad