Card Linked Offers (CLO’s) are a way for consumers to store vouchers or incentives on the debit or credit card that they use to make purchases. In most instances, offer redemption is focused on in-store activity specifically.
In 2015, Card Linked Offers were brought into the mainstream of the Affiliate Industry with many publishers excited at the prospect of being rewarded for in-store sales but despite concerted efforts from major networks and some of the biggest publishers (like TopCashBack and Quidco), Card Linked Offers never quite fulfilled its potential (in the affiliate industry at least).
Fast forward four years and it would seem that no new affiliates have started running card linked schemes but there have been new entrants into the overall market, namely credit card Suppliers as a means of consumer differentiation in a fiercely competitive financial market:
These two types of card linking solutions have a lot similarities both in terms of consumer engagement and retailer partnerships. For example, both schemes involve:
- A bespoke agreement with the retailer to fund the cashback on offer
- Customers opting in to specific offers (usually to help prove incrementality)
- A delay between the transaction occurring and the cashback being paid.
Whilst these schemes have increased in number, the volume of retailers engaging in partnerships of this nature is yet to hit a tipping point. No single scheme has more than 100 retailers which pails in comparison to both the number of affiliate programmes that are active in the UK (circa 4,000+) and the number of high street retailers (100,000+), potentially indicating that brand’s appetite for marketing in-store offers is still in its infancy.
It may comes as a surprise and perhaps even an unwelcome shock then, that Apple have launched a new credit card cashback scheme (announced yesterday) which works in a considerably different way. The scheme will:
- Opt in all retailers that accept Apple Pay at a 2% cashback rate
- Opt in all retailers that don’t accept Apple Pay at a 1% cashback rate
- Require no pre-registration of user’s intent to buy somewhere
We could interpret from the way that Apple are choosing to implement their new credit card cashback scheme that their interests are in understanding consumer spending habits more than in creating a marketing platform for retailers to use. This may become clearer after launch which happens in the US in Summer 2019 and in the UK in Autumn 2019.
Up until then, we can only speculate as to how the industry be affected by such a big shakeup and to add fuel to the fire, we have explored the supporting and negating sentiments behind the questions that are likely to be on everyone’s lips:
Do cashback sites become more appealing?
+ Cashback site rewards tend to be considerably higher than the 2% on offer from Apple’s Card and increased consumer awareness of cashback will play into their hands.
– The biggest headaches for users of cashback sites are the long payment times and the risk of un-tracked sales, the Apple Card is free of such limitations with daily payments the norm so could users abandon these sites in favour of using Apple’s own scheme.
Will consumer’s take advantage?
+ The potential for double dipping cashback or even triple dipping (voucher, cashback and Apple cashback) alongside gaming the system through returns could make shopping lucratively cheaper.
– The early adopters might benefit from loopholes but over time it’s likely that Apple will be wary of returns and likewise retailers are usually conscious of how consumers might use multiple offers together.
Can retailers still de-dupe effectively?
+ Retailers de-dupe for the purposes of ensuring their marketing spend is effectively used. If Apple are funding the cashback themselves, then de-duping really isn’t affected at all.
– Although de-duping might not be affected, there could certainly be spikes in performance caused by Apple increasing rates on specific retailers on a whim. That will prove a challenge to the conventional ways that retailers currently judge their performance and spend.
It’s fair to say that although the initial shock of such a major player entering the card linked space will have caught everyone off guard, it’s expected that the affiliate industry will go largely unaffected. The optimists will be convinced that the halo effect of increased awareness will attract more retailers into the fold and the pessimists will say cashback users will leave in droves to use a quicker paying, more efficient cashback partner. One thing is for sure, the battle for market share in the financial world of credit cards will continue to heat up as providers try to get their hands on as much transactional data as possible and that is where this shakeup is likely to manifest most prominently.
26 March 2019Card Linked Offers, Affiliate Marketing, Attribution
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