Target has finally found a new way on uplifting its current declining state. The bank is now launching a promotion wherein their customers may gain instant rewards. The plan is, whenever a Target REDcard holder purchases using this card the credit card holder would have an immediate 5 percent off from his or her total purchases. The Target REDcard is composed of the Target Credit Card, the Target Visa Card, and the Target Debit Check Card.
Target`s President, Chief Executive Officer and Chairman, Gregg Steinhafel, believes that the discounts that the company would give its customers would be covered by the increased sales, and by the cost that the credit card and debit card would produce. They actually expect to have a store increase of one to two percent.
Target`s credit card accounts dropped to $7.3 billion and are still decreasing when they reported their credit card accounts receivable at the end of the fourth quarter 2010. With this rate, Target foresees that their credit card accounts receivables would drop to $5 billion. However, with this new launching, the company expects to reverse their decreasing rate.
The current rewards system that the company provides its customers would no longer be of service once the new award system takes over. New Target REDcard holders would, however, will get an initial 10 percent off discount in all their purchase while the old cardholders would receive that 10 percent discount when they make their first purchase. This would, however, only occur the moment the company turns to its new reward system. Steinhafel made it clear that as long as the new reward system is still not launching, the old reward system would still continue for the company`s old cardholders.
This new rewards system of the company has been tested at a major retailer in Kansas City in October 2009. In the test, this new idea of Target received a highly good response from their guests. The stores that were involved in the test received a significantly higher sale and profit. With the success of the test, Target could now see the success it would receive once they have launched their 5 percent off rewards system.
Aside from this, Target is also planning on changing their current 10 percent off discount in their pharmacy rewards program. In their new pharmacy rewards system, customers who would use Target REDcard in filling up their prescriptions would get a 5 percent discount in their total purchase.
Target is known to be the second largest discount retailer in the country, second to Wal-Mart. The company`s main base is in Minneapolis, Minnesota but they have stores all over the country.