Tim Walsh never forgot the day right after college when a retailer turned him down for credit.
"I still to this day won't shop at that retailer," he said. "It's a bad experience."
The rejection is worsened today, Walsh says, because so many credit cards issued by retailers come with so-called "loyalty benefits," such as discounts on in-store purchases or rewards for multiple purchases. But bad or no credit means no card, and no card means no loyalty benefits.
But that is changing, says Walsh, who is the chief executive of Ready Credit Corp., which has developed a loyalty solution for shoppers who don't qualify for credit.
ReadyCredit has partnered with Macy's on a kiosk solution that dispenses open-loop prepaid Macy's ReadyCARDs. The ReadyCARD, which is MasterCard-branded, offers the same loyalty benefits, such as in-store discounts and access to special sales, as the Macy's Star Rewards card.
"We strongly believed in changing the experience for consumers so they have an option other than credit," Walsh said. "It's a way to respectfully serve a part of the customer base that isn't able (to get) or (is) uninterested in credit. The Macy's loyal cash customer wasn't able to receive the benefits of other credit customers."
ReadyCredit and Macy's launched a pilot program two years ago to test the prepaid, self-service option. Today the kiosks are deployed in eight Macy's stores. Macy's would not comment on the pilot, citing competitive reasons.
As with any open-loop, network-branded card, the ReadyCARDs can be used anywhere MasterCard is accepted as well as in any Macy's store, of course. The cards can be used to pay bills, and can be reloaded at any readySTATION kiosk, which is manufactured by NCR Corp. To reload funds, users simply insert cash.
Getting the card
Getting a ReadyCARD is similar to getting a Macy's credit card. When Macy's customers apply for a credit card at the point of sale, their credit is checked. If they do not quality for the Macy's credit card, they are directed to a readySTATION kiosk, where they can enroll in the ReadyCredit program. The kiosk then takes enrollment information, asks the customer to insert funds to be loaded on to the card, and then a temporary ReadyCARD is dispensed. Within a few weeks, a personalized ReadyCARD, which has the customer's name embossed on the card, is mailed to the customer.
The kiosks are built on NCR Corp.'s EasyPoint Xpress kiosk platform. And because they rely on wireless connectivity for transaction processing, they can be placed anywhere in the store. TeraNova Consulting has equipped the kiosks with wireless communication ability.
ReadyCredit has offered instant-access prepaid cards since 2005. For the last six months, the company has also tested its readySTATION kiosks in Best Buy stores.
"Their application seemed compelling," said Natasha Royer Coons of TeraNova Consulting. "There are so many people who, when (sales) associates ask at the point of purchase ‘Would you like a credit card?' they get declined."
This solution, she says, serves the customers who fall through the credit gaps — ultimately enhancing the overall customer experience.
"Macy's is revolutionary," Walsh said. "I predict in five years every retailer will have an alternative to credit."
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