American Express’ Plenti

Details of the New Loyalty Rewards Deal

American Express’ Plenti
April 16, 2015

How many retailer loyalty cards do you keep in your purse or wallet? Do you have to sift through multiple plastic tags to find the relevant one, or do you have to pick the explosion of irrelevant cards up off the floor?

You are not alone if you have a handful of loyalty cards to deal with. One study concluded that the average American belongs to 29 different loyalty programs but only uses eight of them on a regular basis. Countless rewards go unredeemed across America because the consumer does not shop enough at an individual store to meet a redemption threshold — and rewards that you can never redeem are not rewards at all.

American Express is taking the first step toward addressing that issue by introducing a no-cost loyalty program that stretches across multiple retailers.

The program, known as Plenti, launches in Spring 2015 including a line-up of big names. Rewards partners include AT&T, Macy’s, Hulu, ExxonMobil, Direct Energy, Rite Aid, and Nationwide Insurance. The diversity of vendors and services increase the chances that consumers will use more than one on a regular basis, making the program more appealing. According to Fortune, the coalition is attempting to add a national restaurant chain, a home improvement group, and a grocery chain.

Similar cross-vendor efforts have failed in the past, but this one looks more promising. The U.S. Loyalty division of American Express will oversee the program. American Express purchased Loyalty Partner, whose subsidiary, Payback, runs successful multi-vendor loyalty platforms overseas.

By incorporating large national chains and companies into the fold, Plenti increases the likelihood that people will participate in the program. A little over 70% of the population of the U.S. lives within a five-mile radius of at least two of the Plenti coalition partners.

While the program is managed by an American Express subsidiary, it does not require the use of an American Express card. Loyalty points apply regardless of the form of payment that is used. American Express is getting its money from set fees paid by the participating companies — although they will be launching a Plenti-branded credit card and must logically expect some card signups and loyalty from customers in return.

The benefits are still being defined, but so far it appears that customers will receive $10 in savings for every 1,000 points earned (it is not clear whether points are equivalent to purchase dollars, making the program an effective 1% return on money spent). Consumers can earn extra points through promotional offers as set by the individual members, some of which may be through online outlets.

Are there any downsides? There are no obvious ones at this point. The program is free and does not appear that it will have any more e-mails, notices, etc. than any other vendor loyalty program.

Of course, security issues will be paramount. A data breach that cascades through multiple vendor systems will have a much greater impact than isolated hacks such as the ones at Target or Home Depot.

It seems likely that if this effort succeeds, competing coalition loyalty programs will follow — especially since within Plenti, each member is granted the right to be the only retailer of that type within the coalition. (There is no room for JC Penney’s, Walgreen’s or similar outlets.) To us, that would be a tremendous positive. Competition always works out in the consumer’s favor. In the meantime, if you do business with any of the retailers in the coalition, consider signing up for the Plenti program when it becomes available.

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