Bank of America is the latest to jump on the trend of offering consumers deals through online discounts.
Reuters reports that Bank of America rolled out its new Groupon-like service Wednesday that allows consumers to receive deals from retailers based on their prior spending.
Customers will receive offers through the bank’s Web site and be awarded through cash payments once a month. Customers won’t need to sign up for anything like they would with Groupon.
The new service, cleverly titled BankAmeriDeals, is looking to restore revenue lost from new regulations that lower the amount of money they receive from debit card swipes. Their previous attempt to make money through monthly debit card fees was met with massive backlash that forced the bank to drop it.
Bank of America, however, isn’t using its new deals service to make money, but rather “deepen relationships with existing customers and attract new ones,” David Godsman, Bank of America’s online and mobile solutions executive, said.
Analysts think the service will draw more account activity and card use for the bank. The key is that the rewards are tied to places customers already shop instead of products that they may only be vaguely interested in.
Bank of America has begun testing the service with its own employees in North Carolina, South Carolina and Nevada. It will expand the program to rest of its employees in February.
The bank does not have a time frame for when the program will become available to other customers.
The bank wants to assure customers that they will not share customer’s private data with third parties. The bank will track customer’s spending, but they hope that the appeal of the discounts outweigh any concerns.
For those wondering how the service works, it’s quite simple. When customers log in to their online accounts, they will see discount offers embedded in their statement. If the customer accepts the offer, it is applied to their account.
When customers make a purchase, they will pay full price, but the discount will be returned to them in cash form at the beginning of each month.
Customers can opt in to receive alerts about offers and how much money they have saved. They are also given the option to opt out of the service.
The bank is not saying which retailers are participating in the new service, but claim that major department stores, fast food chains and local restaurants are included.