Will new credit cards lure Americans to Walmart more often?

Discussion
Photo: Walmart
Sep 19, 2019
George Anderson

Walmart is all about saving consumers money, and the retailer’s new private label credit card program with Capital One is designed to reinforce its low-price image.

Yesterday, Walmart announced that it would launch two new cards on Sept. 24: the Walmart Rewards Card, which offers benefits for purchases made from the retailer, and the Capital One Walmart Rewards Mastercard, which extends cash-back offers to purchases made with other businesses, as well. 

Both cards provide holders with five percent back on purchases made at walmart.com, including Walmart Pickup and Delivery. In-store and Walmart gas station purchases are good for two percent back, although cardholders can earn a five percent reward for 12 months if they make use of Walmart Pay.

The Capital One Mastercard also provides holders with two percent cash back on purchases made outside of Walmart for restaurants and travel. All other purchases come with a one percent cash-back perk. 

“Walmart’s mission has always been to help customers save money so that they can live better, and our new credit card program — which both helps customers earn more when paying for things in and outside of Walmart, and offers many other incredible benefits — is squarely aligned with that mission,” said Daniel Eckert, senior vice president, Walmart services and digital acceleration, in a statement. “As our company has evolved to serve customers shopping in stores, online, and on the Walmart apps, we also recognized the need to fully digitally enable the cardholder experience; that’s why we’ve worked with Capital One to make it possible for cardholders to manage essentially every interaction with the program right from the palm of their hands.”

Individuals who currently use a Walmart credit card will have their accounts switched so they can begin earning rewards on Oct. 11. Their new Capital One cards will begin arriving in the mail in November.

Walmart’s new cards are similar to private label credit cards offered by its rivals at Amazon.com and Target. 

Amazon’s Prime Rewards card offers five percent cash back on purchases made on the site and at Whole Foods. The Target REDcard offers an immediate five percent discount on purchases made in the chain’s stores, on its site and through services such as Shipt’s same-day delivery.

DISCUSSION QUESTIONS: How will Walmart’s two new cash-back cards affect how holders interact with the chain? Will Amazon, Target and other rivals with similar card offers respond with better benefits?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is just a 'me too' play similar to Amazon and Target, which have been doing this for quite a while."
"This reminds us that marketing is a race with no finish line."
"Walmart is late to the party with this concept, but this is still very smart retailing."

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8 Comments on "Will new credit cards lure Americans to Walmart more often?"


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Richard J. George, Ph.D.
BrainTrust

Again, this is neither first nor innovative compared to Amazon and Target. However, it’s a necessary tool to compete with both Amazon and Target. Additionally, it better positions Walmart as a value retailer. It reinforces the notion that some consumers need to save money, but all consumers like to save money. This reminds us that marketing is a race with no finish line. However, the cash back cards may have reached their profitable limits for all three retailers. We need to consider something else to lead or even stay in the race.

Gene Detroyer
BrainTrust

I love it! “This reminds us that marketing is a race with no finish line. “

David Dorf
BrainTrust
2 months 15 days ago

I suppose if you’ve got the card you’re more likely to shop at Walmart. This is just a “me too” play similar to Amazon and Target, which have been doing this for quite a while.

David Naumann
BrainTrust

The benefits of Walmart’s previous credit card were significantly below those offered by Target and Amazon credit cards, however these new cards are leapfrogging ahead of the competition. Target and Amazon branded credit cards both offer a 5 percent discount on purchases from their brand (same as the new Walmart cards), however the new Walmart Capital One Mastercard also provides holders with 2 percent cash back on purchases made outside of Walmart for restaurants and travel and a 1 percent cash-back perk.

This may be enough for regular Walmart shoppers to switch their primary credit card to the new Walmart Capital One Mastercard. It will be interesting to see if this impacts Amazon and Target’s credit card strategies. Personally, I don’t like to have multiple credit cards, but some customers that shop all three brands may keep a credit card for each of the brands and use the respective card when shopping each brand.

It is like the olden days when my parents had credit cards for major brands like Sears, J.C. Penney, Wards, etc.

Gene Detroyer
BrainTrust

Seriously, do we need another credit card? Are our wallets going to be filled with cards from every retailer?

My prediction is that physical credit cards will disappear. All retail payment will be made by phone. Those payments will be controlled by the providers with the best operating systems.

Kai Clarke
BrainTrust

These two new cards will add additional incentives for consumers to get these cards and purchase things from Walmart. Walmart is late to the party with this concept, but this is still very smart retailing.

Craig Sundstrom
Guest

5% back: of course it will succeed. What’s not to like? Uhhm … actually, anyone who understands how “rewards” programs work, which is to get money back, it has to come from somewhere, and that somewhere is higher fees to merchants; so either lower profits for them or higher prices for everyone. I’ll not speculate which of the two it will end up being.

Dan Frechtling
BrainTrust

In the past, Walmart was reluctant to offer discount programs because they might undermine their everyday low price position. But these new cards reflect a re-thinking. Five percent back on purchases at Walmart.com, including grocery pickup and delivery, and 5 percent back on in-store purchases when using Walmart Pay for the first 12 months offer attractive savings.

Some might object that the in-store savings only last 12 months, but that is partially offset by the savings on grocery pick-up and delivery. Plus, cardholders can redeem points in more places, such as travel through Capital One’s travel portal.

For frequent Walmart shoppers, getting cash back on grocery, restaurant and travel spending are appealing, and they may encourage consumers to more routinely shop on Walmart.com.

wpDiscuz
Braintrust
"This is just a 'me too' play similar to Amazon and Target, which have been doing this for quite a while."
"This reminds us that marketing is a race with no finish line."
"Walmart is late to the party with this concept, but this is still very smart retailing."

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