Walgreens’ Prepaid Card to Boost Shopper Spend, Loyalty
Walgreens (NYSE: WAG) is smartly differentiating itself from its drug chain competitors – and encouraging shoppers to boost spending in its stores – by offering a new prepaid card. Partnering with MasterCard on its new Balance Financial Prepaid MasterCard, the prepaid card is tied into the massive drug retailer’s loyalty program. At Walgreens’ 250 initial stores offering the prepaid card, cardholders have the ability to deposit payroll, tax refunds and government benefit checks directly to the prepaid account. In addition, cardholoders can withdraw up to $100 in cash from their card account from a Walgreens cashier. In our favorite competitive feature of the Balance Financial card, Walgreens’ customers can link their current Balance Rewards account to the new prepaid card to earn points for purchases and in-store loads on the card. Shoppers earn 10 points for every $1 spent at Walgreens and Duane Reade stores, 1,000 points for the first direct deposit and more points for in-store reloads and monthly direct deposits. With the loyalty program tie-in, we can only wonder why Walgreens’ primary competitors – including Rite Aid and Walmart – have not implemented a similar program. Balance Rewards’ members will have even more incentive to spend at Walgreens’ stores and on its web site. Already, the drug chain rewards shoppers with dollars off their purchases when they accrue a certain number of points in its Balance Rewards program. Walgreens has benefitted tremendously by offering the loyalty program for more than a year. “Extraordinary customer response to our Balance® Rewards loyalty program, now with more than 85 million enrollees, gives us a wealth of new insights to increase customer delight,” Walgreens President and CEO Greg Wasson said in a statement on the retailer’s fiscal 2013 financial results. Other services such as zero fees for ATM withdrawals at most Walgreens and Duane Reade stores will be included in the prepaid card offerings. Walgreens plans to roll out the prepaid card in 8,100 Walgreens and Duane Reade stores by the end of this year.