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Why Card-Linked Offers Are a Good Thing for Both Consumers and Merchants

Matthew Ong

The paper coupon is a holdover from a different era. Despite the fast growth of online shopping and the rise in retail purchases completed over mobile phones and tablets, paper coupons have stuck around--flooding mailboxes and filling out newspaper inserts.

The explanation for the persistence, though, is fairly simple: There's simply been no better way to redeem an offline discount. There's also little doubt the typical consumer is still deal-hungry and loathe to pay full price.

However, the card-linked offer is a new technology that has the potential to change how you shop. While relatively new to the scene, card-linked offers have made a splash; you may have seen Bank of America running primetime TV ads for its new BankAmeriDeals. Here's a crack at explaining a few of the most important things to know about card-linked offers and why they matter:

1. Redemption is seamless. Card-linked offers are digital coupons loaded right to your credit, debit or store loyalty card. You select what offers you want to entertain (in only a matter of a few clicks on the mouse), and from there, you shop like normal. You won't have any slowdown at checkout, fiddling with paper coupons or potential embarrassment for having pulled a coupon out of your pocket. You also won't waste time clipping discounts out of the newspaper.

Your savings will show up on your card account statement. The card-linked offers are usually quite simple themselves, often granted as a percentage off your total purchase, so you'll see a nice rebate next to your spending data. And if you don't end up redeeming a coupon you loaded? No cost to you. (This isn't Groupon.)

2. Merchants love them, too. Retailers that participate in card-linked offer programs benefit from the same perks as shoppers do--no hassle at checkout or confusion over coupon exclusions--but others as well. Merchants don't need to spend a dime training their staff and they only pay the card-linked offer service provider when a sale is completed.

They also can benefit by receiving big data. Card-linked offers allow sellers to measure the performance of their offers, tracking when and what consumers are buying in real time. Merchants can see who's buying, too, and see if any of these redeemed offers turn into repeat business.

This helps solve one of the major merchant frustrations with the daily deals industry. With daily deals, retailers can't effectively track whether their offer turned into customer loyalty or was only purchased up by one-and-done deal seekers. With card-linked offers, they can.

3. You might get targeted offers. Card-linked offer technology allows merchants to target consumers based on past purchases. If you made a $100 purchase at Nordstrom in the last billing cycle, for example, you might find yourself with a 10 percent off coupon from Neiman Marcus. This allows retailers to get the attention of customers they want and enables customers to get deals tailored to their needs and tastes.

There are, of course, privacy concerns. However the industry claims to use non-personally identifiable information to offer these targeted discounts, so your name will never be attached to any purchase history--only a random string of numbers.

4. You have options, so explore them. With so much potential in the space, there are quite a few companies that have jumped on the idea of the card-linked offer. Bank of America, for instance, launched its BankAmeriDeals program in August of last year and already has 4,000 merchants signed up. edo, a card-linked offer company based in Nashville, has partnered with 3 of the top 6 financial institutions and has more than 200 million cards on file.

Plink, an offline deals provider, recently announced the company now has more than 50,000 physical locations where Plink members can earn rewards. Other card-linked offer companies include Linkable Networks, Cardlytics and SavingStar.

Matthew Ong is a retail analyst at NerdWallet, a savings and spending website dedicated to helping consumers make good use of their money. NerdWallet's projects vary from pulling online coupons from around the Internet to educating students about student loans.

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